Bloglikes - Ecommerce https://www.bloglikes.com/c/ecommerce en-US Thu, 15 Apr 2021 17:51:24 +0000 Sat, 06 Apr 2013 00:00:00 +0000 FeedWriter UserZoom raises $100M, acquires EnjoyHQ, to grow its platform to improve UX and other interactive design elements http://feedproxy.google.com/~r/Techcrunch/~3/zQ0XrQyFEqs/ Graphic designer Paul Rand once famously said that the public was more familiar with bad design than good design. While he was referring to most of the design in the world being “bad”, these days that phrase might take on a second meaning: people typically only notice and talk about (and usually complain about) design when it is ugly, or works badly. Conversely, if it’s good, and it works, you don’t hear much.

Today a startup called UserZoom that has built a platform used by companies like Google, Microsoft, PayPal, Salesforce and many others stay off the bad design radar — with tools to evaluate their design and identify where and when it doesn’t work, and how to link it up better with bigger customer experience strategies — is announcing some significant funding to expand its business.

The company has raised $100 million — money that CEO and co-founder Alfonso de la Nuez said will be used to continue building its tools and mission to make design as critical to a company’s mission as sales might be to an e-commerce company. Alongside this, it has made an acquisition, of another experience insights company called EnjoyHQ, to expand its research operations.

“We feel companies are only scratching the surface of what they could be doing,” he said. “We think experience management could become the third system of record, similar to ERP or CRM.”

This funding is being led by Owl Rock, with other unnamed investors participating. Prior to this, UserZoom raised some $34 million. It is not disclosing valuation, but de la Nuez notes that this latest investment represents a minority stake UserZoom, that the startup is profitable and grew revenues by 40% last year, and that it’s currently on an annual run rate of $80 million.

De la Nuez and UserZoom are currently based out of Los Gatos in the South Bay Area, but the company actually got its start in Barcelona, Spain, where de la Nuez and his co-founder Xavier Mestres originally ran a more old-school user experience design consulting company.

“We had physical labs, testing sites, were we ran focus groups,” he recalled. “It was tedious and manual.”

Years of working like that, and he and Mestres and a third co-founder who has since left the company, Javier Darriba, decided to see how and if they could retool the concept as a piece of software.

Their timing was perfect: It was 2007, the year of the iPhone debut, and the smaller screen of that device, and Apple’s prowess in nailing design and user experience, suddenly got the tech world (and the rest of the world) thinking about how they, too, could rethink their own digital experiences. You might think of it as an earlier iteration of the kind of digital transformation that people talk about today.

The company was growing in Spain at a time when it was much harder for startups to raise substantial rounds (I wonder if that would still be the case today, with companies like Glovo and Wallapop raising huge rounds in recent weeks). so UserZoom made the decision move to California, but Mestres, who is the CTO, still runs the startup’s engineering, design and customer support teams (100 out of 300 staff in all) out of Barcelona. The cost base of employing tech people in Spain are completely different from the Bay Area, “and it’s helped us become profitable,” de la Nuez said.

The core of the company’s product is a platform that runs what it refers to as “XIM” (Experience Insights Management), which lets customers test out any digital experience — be it something on the web, or a phone, or a smartwatch or an interactive voice service, and soon, other interfaces such as automotive. (And it’s a list that is likely to grow as more hardware and services are built.) It can recruit testers to evaluate design, product interaction, marketing decisions that the company is trying out, and so on.

That testing interface is essentially started as product development begins, the idea being that customers can apply the principle of “agile development” as they continue to work on the product, rather than leave all of that to be tested after a product is technically already completed.

As a company users UserZoom, the results of tests can be shared among different stakeholders who can make notes on how product development would work (or wouldn’t work) with how they are envisioning, say, a new sales strategy or engagement goal. It also helps develop KPIs for customers to determine how and if a design is meeting KPIs.

These can cover not just basic goals like “more conversions” or “less shopping cart abandonment” or “opting in to cookies” but also whether a design is meeting accessibility goals. (As seen with the recent controversy around Ravelry, this is indeed a growing issue and one that de la Nuez said will be getting more attention at UserZoom.)

The space of UX and testing to improve it is a pretty crowded and well-funded one, with others in it including LogRocket, UserTesting, ContentSquare, companies focusing on specific verticals, like AB Tasty and many others. What’s giving UserZoom an edge, it seems, is not just its extensive and impressive customer base, but its focus on trying to provide an end-to-end concept of design and experience and how it might fit in with a bigger business strategy.

“In today’s digital economy, the quality of the customer and user experience is the driving factor that helps businesses retain customers and generate increased revenue,” said Pravin Vazirani, managing director at Owl Rock, in a statement. “Despite this, many organizations are still unable to properly extract and manage the potential insights that lie within a customer journey. UserZoom enables companies to harness these insights and drive improved digital experiences.” Andy Lefkarites, an investor at Owl Rock said in a statement, “We see a tremendous market opportunity for UserZoom, which enables companies of all sizes and industries to continually enhance and prioritize their digital experience strategy. We are pleased to be able to support UserZoom with growth capital to enable them to seize that opportunity.”

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Thu, 15 Apr 2021 10:14:44 +0000 BlogLikes - Find Most Popular Blogs Developer eCommerce Europe Funding Media TC Cx Design UI User Experience User Testing Ux
Read Jeff Bezos' final letter to shareholders as Amazon CEO right here http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/5gzvn7FcjJc/amazon-jeff-bezos-final-letter-to-shareholders-as-ceo-2021-4 Amazon cofounder and CEO Jeff Bezos.

AP Photo

  • Amazon CEO and cofounder Jeff Bezos is stepping down as chief executive later this year.
  • Every year since Amazon went public, Bezos has written a widely-read "letter to the shareholders."
  • His final letter, below, includes what Bezos sees as the future of the company.
  • Visit the Business section of Insider for more stories.

In 1997, Amazon CEO Jeff Bezos wrote his first letter to shareholders and set a precedent for decades of startups after it.

Despite Amazon's tiny footprint at the time, Bezos' letter to shareholders laid out a bold vision for the company: a relentless focus on customers above all else, and a prioritization of reinvestment over short-term shareholder returns.

Each year since, Bezos has written a new letter to shareholders that has become a highly anticipated. With Bezos scheduled to step down as chief executive later this year, he just published his final letter.

Read the full letter below:

To our shareowners:

In Amazon's 1997 letter to shareholders, our first, I talked about our hope to create an "enduring franchise," one that would reinvent what it means to serve customers by unlocking the internet's power. I noted that Amazon had grown from having 158 employees to 614, and that we had surpassed 1.5 million customer accounts. We had just gone public at a split-adjusted stock price of $1.50 per share. I wrote that it was Day 1.

We've come a long way since then, and we are working harder than ever to serve and delight customers. Last year, we hired 500,000 employees and now directly employ 1.3 million people around the world. We have more than 200 million Prime members worldwide. More than 1.9 million small and medium-sized businesses sell in our store, and they make up close to 60% of our retail sales. Customers have connected more than 100 million smart home devices to Alexa. Amazon Web Services serves millions of customers and ended 2020 with a $50 billion annualized run rate. In 1997, we hadn't invented Prime, Marketplace, Alexa, or AWS. They weren't even ideas then, and none was preordained. We took great risk with each one and put sweat and ingenuity into each one.

Along the way, we've created $1.6 trillion of wealth for shareowners. Who are they? Your Chair is one, and my Amazon shares have made me wealthy. But more than 7/8ths of the shares, representing $1.4 trillion of wealth creation, are owned by others. Who are they? They're pension funds, universities, and 401(k)s, and they're Mary and Larry, who sent me this note out of the blue just as I was sitting down to write this shareholder letter:

Letter to Jeff Bezos, from shareholder (1)

Amazon

Letter to Jeff Bezos, from shareholder (2)

Amazon

I am approached with similar stories all the time. I know people who've used their Amazon money for college, for emergencies, for houses, for vacations, to start their own business, for charity - and the list goes on. I'm proud of the wealth we've created for shareowners. It's significant, and it improves their lives. But I also know something else: it's not the largest part of the value we've created.

Create More Than You Consume

If you want to be successful in business (in life, actually), you have to create more than you consume. Your goal should be to create value for everyone you interact with. Any business that doesn't create value for those it touches, even if it appears successful on the surface, isn't long for this world. It's on the way out.

Remember that stock prices are not about the past. They are a prediction of future cash flows discounted back to the present. The stock market anticipates. I'm going to switch gears for a moment and talk about the past. How much value did we create for shareowners in 2020? This is a relatively easy question to answer because accounting systems are set up to answer it. Our net income in 2020 was $21.3 billion. If, instead of being a publicly traded company with thousands of owners, Amazon were a sole proprietorship with a single owner, that's how much the owner would have earned in 2020.

How about employees? This is also a reasonably easy value creation question to answer because we can look at compensation expense. What is an expense for a company is income for employees. In 2020, employees earned $80 billion, plus another $11 billion to include benefits and various payroll taxes, for a total of $91 billion.

How about third-party sellers? We have an internal team (the Selling Partner Services team) that works to answer that question. They estimate that, in 2020, third-party seller profits from selling on Amazon were between $25 billion and $39 billion, and to be conservative here I'll go with $25 billion.

For customers, we have to break it down into consumer customers and AWS customers.

We'll do consumers first. We offer low prices, vast selection, and fast delivery, but imagine we ignore all of that for the purpose of this estimate and value only one thing: we save customers time.

Customers complete 28% of purchases on Amazon in three minutes or less, and half of all purchases are finished in less than 15 minutes. Compare that to the typical shopping trip to a physical store - driving, parking, searching store aisles, waiting in the checkout line, finding your car, and driving home. Research suggests the typical physical store trip takes about an hour. If you assume that a typical Amazon purchase takes 15 minutes and that it saves you a couple of trips to a physical store a week, that's more than 75 hours a year saved. That's important. We're all busy in the early 21st century.

So that we can get a dollar figure, let's value the time savings at $10 per hour, which is conservative. Seventy-five hours multiplied by $10 an hour and subtracting the cost of Prime gives you value creation for each Prime member of about $630. We have 200 million Prime members, for a total in 2020 of $126 billion of value creation.

AWS is challenging to estimate because each customer's workload is so different, but we'll do it anyway, acknowledging up front that the error bars are high. Direct cost improvements from operating in the cloud versus on premises vary, but a reasonable estimate is 30%. Across AWS's entire 2020 revenue of $45 billion, that 30% would imply customer value creation of $19 billion (what would have cost them $64 billion on their own cost $45 billion from AWS). The difficult part of this estimation exercise is that the direct cost reduction is the smallest portion of the customer benefit of moving to the cloud. The bigger benefit is the increased speed of software development - something that can significantly improve the customer's competitiveness and top line. We have no reasonable way of estimating that portion of customer value except to say that it's almost certainly larger than the direct cost savings. To be conservative here (and remembering we're really only trying to get ballpark estimates), I'll say it's the same and call AWS customer value creation $38 billion in 2020.

Adding AWS and consumer together gives us total customer value creation in 2020 of $164 billion.

Summarizing:
Shareholders $21B
Employees $91B
3P Sellers $25B
Customers $164B
Total $301B

If each group had an income statement representing their interactions with Amazon, the numbers above would be the "bottom lines" from those income statements. These numbers are part of the reason why people work for us, why sellers sell through us, and why customers buy from us. We create value for them. And this value creation is not a zero-sum game. It is not just moving money from one pocket to another. Draw the box big around all of society, and you'll find that invention is the root of all real value creation. And value created is best thought of as a metric for innovation.

Of course, our relationship with these constituencies and the value we create isn't exclusively dollars and cents. Money doesn't tell the whole story. Our relationship with shareholders, for example, is relatively simple. They invest and hold shares for a duration of their choosing. We provide direction to shareowners infrequently on matters such as annual meetings and the right process to vote their shares. And even then they can ignore those directions and just skip voting.

Our relationship with employees is a very different example. We have processes they follow and standards they meet. We require training and various certifications. Employees have to show up at appointed times. Our interactions with employees are many, and they're fine-grained. It's not just about the pay and the benefits. It's about all the other detailed aspects of the relationship too.

Does your Chair take comfort in the outcome of the recent union vote in Bessemer? No, he doesn't. I think we need to do a better job for our employees. While the voting results were lopsided and our direct relationship with employees is strong, it's clear to me that we need a better vision for how we create value for employees - a vision for their success.

If you read some of the news reports, you might think we have no care for employees. In those reports, our employees are sometimes accused of being desperate souls and treated as robots. That's not accurate. They're sophisticated and thoughtful people who have options for where to work. When we survey fulfillment center employees, 94% say they would recommend Amazon to a friend as a place to work.

Employees are able to take informal breaks throughout their shifts to stretch, get water, use the rest room, or talk to a manager, all without impacting their performance. These informal work breaks are in addition to the 30-minute lunch and 30-minute break built into their normal schedule.

We don't set unreasonable performance goals. We set achievable performance goals that take into account tenure and actual employee performance data. Performance is evaluated over a long period of time as we know that a variety of things can impact performance in any given week, day, or hour. If employees are on track to miss a performance target over a period of time, their manager talks with them and provides coaching.

Coaching is also extended to employees who are excelling and in line for increased responsibilities. In fact, 82% of coaching is positive, provided to employees who are meeting or exceeding expectations. We terminate the employment of less than 2.6% of employees due to their inability to perform their jobs (and that number was even lower in 2020 because of operational impacts of COVID-19).

Earth's Best Employer and Earth's Safest Place to Work

The fact is, the large team of thousands of people who lead operations at Amazon have always cared deeply for our hourly employees, and we're proud of the work environment we've created. We're also proud of the fact that Amazon is a company that does more than just create jobs for computer scientists and people with advanced degrees. We create jobs for people who never got that advantage.

Despite what we've accomplished, it's clear to me that we need a better vision for our employees' success. We have always wanted to be Earth's Most Customer-Centric Company. We won't change that. It's what got us here. But I am committing us to an addition. We are going to be Earth's Best Employer and Earth's Safest Place to Work.

In my upcoming role as Executive Chair, I'm going to focus on new initiatives. I'm an inventor. It's what I enjoy the most and what I do best. It's where I create the most value. I'm excited to work alongside the large team of passionate people we have in Ops and help invent in this arena of Earth's Best Employer and Earth's Safest Place to Work. On the details, we at Amazon are always flexible, but on matters of vision we are stubborn and relentless. We have never failed when we set our minds to something, and we're not going to fail at this either.

We dive deep into safety issues. For example, about 40% of work-related injuries at Amazon are related to musculoskeletal disorders (MSDs), things like sprains or strains that can be caused by repetitive motions. MSDs are common in the type of work that we do and are more likely to occur during an employee's first six months. We need to invent solutions to reduce MSDs for new employees, many of whom might be working in a physical role for the first time.

One such program is WorkingWell - which we launched to 859,000 employees at 350 sites across North America and Europe in 2020 - where we coach small groups of employees on body mechanics, proactive wellness, and safety. In addition to reducing workplace injuries, these concepts have a positive impact on regular day-to-day activities outside work.

We're developing new automated staffing schedules that use sophisticated algorithms to rotate employees among jobs that use different muscle-tendon groups to decrease repetitive motion and help protect employees from MSD risks. This new technology is central to a job rotation program that we're rolling out throughout 2021.

Our increased attention to early MSD prevention is already achieving results. From 2019 to 2020, overall MSDs decreased by 32%, and MSDs resulting in time away from work decreased by more than half.

We employ 6,200 safety professionals at Amazon. They use the science of safety to solve complex problems and establish new industry best practices. In 2021, we'll invest more than $300 million into safety projects, including an initial $66 million to create technology that will help prevent collisions of forklifts and other types of industrial vehicles.

When we lead, others follow. Two and a half years ago, when we set a $15 minimum wage for our hourly employees, we did so because we wanted to lead on wages - not just run with the pack - and because we believed it was the right thing to do. A recent paper by economists at the University of California-Berkeley and Brandeis University analyzed the impact of our decision to raise our minimum starting pay to $15 per hour. Their assessment reflects what we've heard from employees, their families, and the communities they live in.

Our increase in starting wage boosted local economies across the country by benefiting not only our own employees but also other workers in the same community. The study showed that our pay raise resulted in a 4.7% increase in the average hourly wage among other employers in the same labor market.

And we're not done leading. If we want to be Earth's Best Employer, we shouldn't settle for 94% of employees saying they would recommend Amazon to a friend as a place to work. We have to aim for 100%. And we'll do that by continuing to lead on wages, on benefits, on upskilling opportunities, and in other ways that we will figure out over time.

If any shareowners are concerned that Earth's Best Employer and Earth's Safest Place to Work might dilute our focus on Earth's Most Customer-Centric Company, let me set your mind at ease. Think of it this way. If we can operate two businesses as different as consumer ecommerce and AWS, and do both at the highest level, we can certainly do the same with these two vision statements. In fact, I'm confident they will reinforce each other.

The Climate Pledge

In an earlier draft of this letter, I started this section with arguments and examples designed to demonstrate that human-induced climate change is real. But, bluntly, I think we can stop saying that now. You don't have to say that photosynthesis is real, or make the case that gravity is real, or that water boils at 100 degrees Celsius at sea level. These things are simply true, as is the reality of climate change.

Not long ago, most people believed that it would be good to address climate change, but they also thought it would cost a lot and would threaten jobs, competitiveness, and economic growth. We now know better. Smart action on climate change will not only stop bad things from happening, it will also make our economy more efficient, help drive technological change, and reduce risks. Combined, these can lead to more and better jobs, healthier and happier children, more productive workers, and a more prosperous future. This doesn't mean it will be easy. It won't be. The coming decade will be decisive. The economy in 2030 will need to be vastly different from what it is today, and Amazon plans to be at the heart of the change. We launched The Climate Pledge together with Global Optimism in September 2019 because we wanted to help drive this positive revolution. We need to be part of a growing team of corporations that understand the imperatives and the opportunities of the 21st century.

Now, less than two years later, 53 companies representing almost every sector of the economy have signed The Climate Pledge. Signatories such as Best Buy, IBM, Infosys, Mercedes-Benz, Microsoft, Siemens, and Verizon have committed to achieve net-zero carbon in their worldwide businesses by 2040, 10 years ahead of the Paris Agreement. The Pledge also requires them to measure and report greenhouse gas emissions on a regular basis; implement decarbonization strategies through real business changes and innovations; and neutralize any remaining emissions with additional, quantifiable, real, permanent, and socially beneficial offsets. Credible, quality offsets are precious, and we should reserve them to compensate for economic activities where low-carbon alternatives don't exist.

The Climate Pledge signatories are making meaningful, tangible, and ambitious commitments. Uber has a goal of operating as a zero-emission platform in Canada, Europe, and the U.S. by 2030, and Henkel plans to source 100% of the electricity it uses for production from renewable sources. Amazon is making progress toward our own goal of 100% renewable energy by 2025, five years ahead of our initial 2030 target. Amazon is the largest corporate buyer of renewable energy in the world. We have 62 utility-scale wind and solar projects and 125 solar rooftops on fulfillment and sort centers around the globe. These projects have the capacity to generate over 6.9 gigawatts and deliver more than 20 million megawatt-hours of energy annually.

Transportation is a major component of Amazon's business operations and the toughest part of our plan to meet net-zero carbon by 2040. To help rapidly accelerate the market for electric vehicle technology, and to help all companies transition to greener technologies, we invested more than $1 billion in Rivian - and ordered 100,000 electric delivery vans from the company. We've also partnered with Mahindra in India and Mercedes-Benz in Europe. These custom electric delivery vehicles from Rivian are already operational, and they first hit the road in Los Angeles this past February. Ten thousand new vehicles will be on the road as early as next year, and all 100,000 vehicles will be on the road by 2030 - saving millions of metric tons of carbon. A big reason we want companies to join The Climate Pledge is to signal to the marketplace that businesses should start inventing and developing new technologies that signatories need to make good on the Pledge. Our purchase of 100,000 Rivian electric vans is a perfect example.

To further accelerate investment in new technologies needed to build a zero-carbon economy, we introduced the Climate Pledge Fund last June. The investment program started with $2 billion to invest in visionary companies that aim to facilitate the transition to a low-carbon economy. Amazon has already announced investments in CarbonCure Technologies, Pachama, Redwood Materials, Rivian, Turntide Technologies, ZeroAvia, and Infinium - and these are just some of the innovative companies we hope will build the zero-carbon economy of the future.

I have also personally allocated $10 billion to provide grants to help catalyze the systemic change we will need in the coming decade. We'll be supporting leading scientists, activists, NGOs, environmental justice organizations, and others working to fight climate change and protect the natural world. Late last year, I made my first round of grants to 16 organizations working on innovative and needle-moving solutions. It's going to take collective action from big companies, small companies, nation states, global organizations, and individuals, and I'm excited to be part of this journey and optimistic that humanity can come together to solve this challenge.

Differentiation is Survival and the Universe Wants You to be Typical
This is my last annual shareholder letter as the CEO of Amazon, and I have one last thing of utmost importance I feel compelled to teach. I hope all Amazonians take it to heart.

Here is a passage from Richard Dawkins' (extraordinary) book The Blind Watchmaker. It's about a basic fact of biology.

"Staving off death is a thing that you have to work at. Left to itself - and that is what it is when it dies - the body tends to revert to a state of equilibrium with its environment. If you measure some quantity such as the temperature, the acidity, the water content or the electrical potential in a living body, you will typically find that it is markedly different from the corresponding measure in the surroundings. Our bodies, for instance, are usually hotter than our surroundings, and in cold climates they have to work hard to maintain the differential. When we die the work stops, the temperature differential starts to disappear, and we end up the same temperature as our surroundings. Not all animals work so hard to avoid coming into equilibrium with their surrounding temperature, but all animals do some comparable work. For instance, in a dry country, animals and plants work to maintain the fluid content of their cells, work against a natural tendency for water to flow from them into the dry outside world. If they fail they die. More generally, if living things didn't work actively to prevent it, they would eventually merge into their surroundings, and cease to exist as autonomous beings. That is what happens when they die."

While the passage is not intended as a metaphor, it's nevertheless a fantastic one, and very relevant to Amazon. I would argue that it's relevant to all companies and all institutions and to each of our individual lives too. In what ways does the world pull at you in an attempt to make you normal? How much work does it take to maintain your distinctiveness? To keep alive the thing or things that make you special?

I know a happily married couple who have a running joke in their relationship. Not infrequently, the husband looks at the wife with faux distress and says to her, "Can't you just be normal?" They both smile and laugh, and of course the deep truth is that her distinctiveness is something he loves about her. But, at the same time, it's also true that things would often be easier - take less energy - if we were a little more normal.

This phenomenon happens at all scale levels. Democracies are not normal. Tyranny is the historical norm. If we stopped doing all of the continuous hard work that is needed to maintain our distinctiveness in that regard, we would quickly come into equilibrium with tyranny.

We all know that distinctiveness - originality - is valuable. We are all taught to "be yourself." What I'm really asking you to do is to embrace and be realistic about how much energy it takes to maintain that distinctiveness. The world wants you to be typical - in a thousand ways, it pulls at you. Don't let it happen.

You have to pay a price for your distinctiveness, and it's worth it. The fairy tale version of "be yourself" is that all the pain stops as soon as you allow your distinctiveness to shine. That version is misleading. Being yourself is worth it, but don't expect it to be easy or free. You'll have to put energy into it continuously.

The world will always try to make Amazon more typical - to bring us into equilibrium with our environment. It will take continuous effort, but we can and must be better than that.

* * *

As always, I attach our 1997 shareholder letter. It concluded with this: "We at Amazon.com are grateful to our customers for their business and trust, to each other for our hard work, and to our shareholders for their support and encouragement." That hasn't changed a bit. I want to especially thank Andy Jassy for agreeing to take on the CEO role. It's a hard job with a lot of responsibility. Andy is brilliant and has the highest of high standards. I guarantee you that Andy won't let the universe make us typical. He will muster the energy needed to keep alive in us what makes us special. That won't be easy, but it is critical. I also predict it will be satisfying and oftentimes fun. Thank you, Andy.

To all of you: be kind, be original, create more than you consume, and never, never, never let the universe smooth you into your surroundings. It remains Day 1.

Sincerely,

Jeffrey P. Bezos
Founder and Chief Executive Officer
Amazon.com, Inc.

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[Author: insider@insider.com (Ben Gilbert)]

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Thu, 15 Apr 2021 09:49:06 +0000 BlogLikes - Find Most Popular Blogs Tech Insider Markets Amazon Shareholders Jeff Bezos Joy Covey Retail eCommerce
Jeff Bezos posts his final letter to shareholders as Amazon CEO. Read the key takeaways and full note. http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/5gzvn7FcjJc/amazon-jeff-bezos-final-letter-to-shareholders-as-ceo-2021-4 Amazon cofounder and CEO Jeff Bezos.

AP Photo

  • Amazon CEO and cofounder Jeff Bezos is stepping down as chief executive later this year.
  • Every year since Amazon went public, Bezos has written a widely-read letter to the shareholders.
  • His final letter, below, includes what Bezos sees as the future of the company.
  • Visit the Business section of Insider for more stories.

In 1997, Amazon CEO Jeff Bezos wrote his first letter to shareholders and set a precedent for decades of startups after it.

Despite Amazon's tiny footprint at the time, Bezos' letter to shareholders laid out a bold vision for the company: a relentless focus on customers above all else, and a prioritization of reinvestment over short-term shareholder returns.

Each year since, Bezos has written a new letter to shareholders that has become highly anticipated. With Bezos scheduled to step down as chief executive later this year, he just published his final letter.

In it, Bezos highlights a critical concept that has guided his oversight of one of the world's biggest companies: "You have to create more than you consume," Bezos says in the letter. "Your goal should be to create value for everyone you interact with."

He also as "Earth's best employer and Earth's safest place to work" - a direct refutation of repeated allegations from delivery and warehouse employees who say they're overworked, and are forced to pee in bottles to save time. "The fact is, the large team of thousands of people who lead operations at Amazon have always cared deeply for our hourly employees, and we're proud of the work environment we've created," Bezos says.

And he looks to the future as well, where Andy Jassy will take over as CEO. "It's a hard job with a lot of responsibility," he says. "Andy is brilliant and has the highest of high standards. I guarantee you that Andy won't let the universe make us typical."

Read the full letter:

To our shareowners:

In Amazon's 1997 letter to shareholders, our first, I talked about our hope to create an "enduring franchise," one that would reinvent what it means to serve customers by unlocking the internet's power. I noted that Amazon had grown from having 158 employees to 614, and that we had surpassed 1.5 million customer accounts. We had just gone public at a split-adjusted stock price of $1.50 per share. I wrote that it was Day 1.

We've come a long way since then, and we are working harder than ever to serve and delight customers. Last year, we hired 500,000 employees and now directly employ 1.3 million people around the world. We have more than 200 million Prime members worldwide. More than 1.9 million small and medium-sized businesses sell in our store, and they make up close to 60% of our retail sales. Customers have connected more than 100 million smart home devices to Alexa. Amazon Web Services serves millions of customers and ended 2020 with a $50 billion annualized run rate. In 1997, we hadn't invented Prime, Marketplace, Alexa, or AWS. They weren't even ideas then, and none was preordained. We took great risk with each one and put sweat and ingenuity into each one.

Along the way, we've created $1.6 trillion of wealth for shareowners. Who are they? Your Chair is one, and my Amazon shares have made me wealthy. But more than 7/8ths of the shares, representing $1.4 trillion of wealth creation, are owned by others. Who are they? They're pension funds, universities, and 401(k)s, and they're Mary and Larry, who sent me this note out of the blue just as I was sitting down to write this shareholder letter:

Letter to Jeff Bezos, from shareholder (1)

Amazon

Letter to Jeff Bezos, from shareholder (2)

Amazon

I am approached with similar stories all the time. I know people who've used their Amazon money for college, for emergencies, for houses, for vacations, to start their own business, for charity - and the list goes on. I'm proud of the wealth we've created for shareowners. It's significant, and it improves their lives. But I also know something else: it's not the largest part of the value we've created.

Create More Than You Consume

If you want to be successful in business (in life, actually), you have to create more than you consume. Your goal should be to create value for everyone you interact with. Any business that doesn't create value for those it touches, even if it appears successful on the surface, isn't long for this world. It's on the way out.

Remember that stock prices are not about the past. They are a prediction of future cash flows discounted back to the present. The stock market anticipates. I'm going to switch gears for a moment and talk about the past. How much value did we create for shareowners in 2020? This is a relatively easy question to answer because accounting systems are set up to answer it. Our net income in 2020 was $21.3 billion. If, instead of being a publicly traded company with thousands of owners, Amazon were a sole proprietorship with a single owner, that's how much the owner would have earned in 2020.

How about employees? This is also a reasonably easy value creation question to answer because we can look at compensation expense. What is an expense for a company is income for employees. In 2020, employees earned $80 billion, plus another $11 billion to include benefits and various payroll taxes, for a total of $91 billion.

How about third-party sellers? We have an internal team (the Selling Partner Services team) that works to answer that question. They estimate that, in 2020, third-party seller profits from selling on Amazon were between $25 billion and $39 billion, and to be conservative here I'll go with $25 billion.

For customers, we have to break it down into consumer customers and AWS customers.

We'll do consumers first. We offer low prices, vast selection, and fast delivery, but imagine we ignore all of that for the purpose of this estimate and value only one thing: we save customers time.

Customers complete 28% of purchases on Amazon in three minutes or less, and half of all purchases are finished in less than 15 minutes. Compare that to the typical shopping trip to a physical store - driving, parking, searching store aisles, waiting in the checkout line, finding your car, and driving home. Research suggests the typical physical store trip takes about an hour. If you assume that a typical Amazon purchase takes 15 minutes and that it saves you a couple of trips to a physical store a week, that's more than 75 hours a year saved. That's important. We're all busy in the early 21st century.

So that we can get a dollar figure, let's value the time savings at $10 per hour, which is conservative. Seventy-five hours multiplied by $10 an hour and subtracting the cost of Prime gives you value creation for each Prime member of about $630. We have 200 million Prime members, for a total in 2020 of $126 billion of value creation.

AWS is challenging to estimate because each customer's workload is so different, but we'll do it anyway, acknowledging up front that the error bars are high. Direct cost improvements from operating in the cloud versus on premises vary, but a reasonable estimate is 30%. Across AWS's entire 2020 revenue of $45 billion, that 30% would imply customer value creation of $19 billion (what would have cost them $64 billion on their own cost $45 billion from AWS). The difficult part of this estimation exercise is that the direct cost reduction is the smallest portion of the customer benefit of moving to the cloud. The bigger benefit is the increased speed of software development - something that can significantly improve the customer's competitiveness and top line. We have no reasonable way of estimating that portion of customer value except to say that it's almost certainly larger than the direct cost savings. To be conservative here (and remembering we're really only trying to get ballpark estimates), I'll say it's the same and call AWS customer value creation $38 billion in 2020.

Adding AWS and consumer together gives us total customer value creation in 2020 of $164 billion.

Summarizing:
Shareholders $21B
Employees $91B
3P Sellers $25B
Customers $164B
Total $301B

If each group had an income statement representing their interactions with Amazon, the numbers above would be the "bottom lines" from those income statements. These numbers are part of the reason why people work for us, why sellers sell through us, and why customers buy from us. We create value for them. And this value creation is not a zero-sum game. It is not just moving money from one pocket to another. Draw the box big around all of society, and you'll find that invention is the root of all real value creation. And value created is best thought of as a metric for innovation.

Of course, our relationship with these constituencies and the value we create isn't exclusively dollars and cents. Money doesn't tell the whole story. Our relationship with shareholders, for example, is relatively simple. They invest and hold shares for a duration of their choosing. We provide direction to shareowners infrequently on matters such as annual meetings and the right process to vote their shares. And even then they can ignore those directions and just skip voting.

Our relationship with employees is a very different example. We have processes they follow and standards they meet. We require training and various certifications. Employees have to show up at appointed times. Our interactions with employees are many, and they're fine-grained. It's not just about the pay and the benefits. It's about all the other detailed aspects of the relationship too.

Does your Chair take comfort in the outcome of the recent union vote in Bessemer? No, he doesn't. I think we need to do a better job for our employees. While the voting results were lopsided and our direct relationship with employees is strong, it's clear to me that we need a better vision for how we create value for employees - a vision for their success.

If you read some of the news reports, you might think we have no care for employees. In those reports, our employees are sometimes accused of being desperate souls and treated as robots. That's not accurate. They're sophisticated and thoughtful people who have options for where to work. When we survey fulfillment center employees, 94% say they would recommend Amazon to a friend as a place to work.

Employees are able to take informal breaks throughout their shifts to stretch, get water, use the rest room, or talk to a manager, all without impacting their performance. These informal work breaks are in addition to the 30-minute lunch and 30-minute break built into their normal schedule.

We don't set unreasonable performance goals. We set achievable performance goals that take into account tenure and actual employee performance data. Performance is evaluated over a long period of time as we know that a variety of things can impact performance in any given week, day, or hour. If employees are on track to miss a performance target over a period of time, their manager talks with them and provides coaching.

Coaching is also extended to employees who are excelling and in line for increased responsibilities. In fact, 82% of coaching is positive, provided to employees who are meeting or exceeding expectations. We terminate the employment of less than 2.6% of employees due to their inability to perform their jobs (and that number was even lower in 2020 because of operational impacts of COVID-19).

Earth's Best Employer and Earth's Safest Place to Work

The fact is, the large team of thousands of people who lead operations at Amazon have always cared deeply for our hourly employees, and we're proud of the work environment we've created. We're also proud of the fact that Amazon is a company that does more than just create jobs for computer scientists and people with advanced degrees. We create jobs for people who never got that advantage.

Despite what we've accomplished, it's clear to me that we need a better vision for our employees' success. We have always wanted to be Earth's Most Customer-Centric Company. We won't change that. It's what got us here. But I am committing us to an addition. We are going to be Earth's Best Employer and Earth's Safest Place to Work.

In my upcoming role as Executive Chair, I'm going to focus on new initiatives. I'm an inventor. It's what I enjoy the most and what I do best. It's where I create the most value. I'm excited to work alongside the large team of passionate people we have in Ops and help invent in this arena of Earth's Best Employer and Earth's Safest Place to Work. On the details, we at Amazon are always flexible, but on matters of vision we are stubborn and relentless. We have never failed when we set our minds to something, and we're not going to fail at this either.

We dive deep into safety issues. For example, about 40% of work-related injuries at Amazon are related to musculoskeletal disorders (MSDs), things like sprains or strains that can be caused by repetitive motions. MSDs are common in the type of work that we do and are more likely to occur during an employee's first six months. We need to invent solutions to reduce MSDs for new employees, many of whom might be working in a physical role for the first time.

One such program is WorkingWell - which we launched to 859,000 employees at 350 sites across North America and Europe in 2020 - where we coach small groups of employees on body mechanics, proactive wellness, and safety. In addition to reducing workplace injuries, these concepts have a positive impact on regular day-to-day activities outside work.

We're developing new automated staffing schedules that use sophisticated algorithms to rotate employees among jobs that use different muscle-tendon groups to decrease repetitive motion and help protect employees from MSD risks. This new technology is central to a job rotation program that we're rolling out throughout 2021.

Our increased attention to early MSD prevention is already achieving results. From 2019 to 2020, overall MSDs decreased by 32%, and MSDs resulting in time away from work decreased by more than half.

We employ 6,200 safety professionals at Amazon. They use the science of safety to solve complex problems and establish new industry best practices. In 2021, we'll invest more than $300 million into safety projects, including an initial $66 million to create technology that will help prevent collisions of forklifts and other types of industrial vehicles.

When we lead, others follow. Two and a half years ago, when we set a $15 minimum wage for our hourly employees, we did so because we wanted to lead on wages - not just run with the pack - and because we believed it was the right thing to do. A recent paper by economists at the University of California-Berkeley and Brandeis University analyzed the impact of our decision to raise our minimum starting pay to $15 per hour. Their assessment reflects what we've heard from employees, their families, and the communities they live in.

Our increase in starting wage boosted local economies across the country by benefiting not only our own employees but also other workers in the same community. The study showed that our pay raise resulted in a 4.7% increase in the average hourly wage among other employers in the same labor market.

And we're not done leading. If we want to be Earth's Best Employer, we shouldn't settle for 94% of employees saying they would recommend Amazon to a friend as a place to work. We have to aim for 100%. And we'll do that by continuing to lead on wages, on benefits, on upskilling opportunities, and in other ways that we will figure out over time.

If any shareowners are concerned that Earth's Best Employer and Earth's Safest Place to Work might dilute our focus on Earth's Most Customer-Centric Company, let me set your mind at ease. Think of it this way. If we can operate two businesses as different as consumer ecommerce and AWS, and do both at the highest level, we can certainly do the same with these two vision statements. In fact, I'm confident they will reinforce each other.

The Climate Pledge

In an earlier draft of this letter, I started this section with arguments and examples designed to demonstrate that human-induced climate change is real. But, bluntly, I think we can stop saying that now. You don't have to say that photosynthesis is real, or make the case that gravity is real, or that water boils at 100 degrees Celsius at sea level. These things are simply true, as is the reality of climate change.

Not long ago, most people believed that it would be good to address climate change, but they also thought it would cost a lot and would threaten jobs, competitiveness, and economic growth. We now know better. Smart action on climate change will not only stop bad things from happening, it will also make our economy more efficient, help drive technological change, and reduce risks. Combined, these can lead to more and better jobs, healthier and happier children, more productive workers, and a more prosperous future. This doesn't mean it will be easy. It won't be. The coming decade will be decisive. The economy in 2030 will need to be vastly different from what it is today, and Amazon plans to be at the heart of the change. We launched The Climate Pledge together with Global Optimism in September 2019 because we wanted to help drive this positive revolution. We need to be part of a growing team of corporations that understand the imperatives and the opportunities of the 21st century.

Now, less than two years later, 53 companies representing almost every sector of the economy have signed The Climate Pledge. Signatories such as Best Buy, IBM, Infosys, Mercedes-Benz, Microsoft, Siemens, and Verizon have committed to achieve net-zero carbon in their worldwide businesses by 2040, 10 years ahead of the Paris Agreement. The Pledge also requires them to measure and report greenhouse gas emissions on a regular basis; implement decarbonization strategies through real business changes and innovations; and neutralize any remaining emissions with additional, quantifiable, real, permanent, and socially beneficial offsets. Credible, quality offsets are precious, and we should reserve them to compensate for economic activities where low-carbon alternatives don't exist.

The Climate Pledge signatories are making meaningful, tangible, and ambitious commitments. Uber has a goal of operating as a zero-emission platform in Canada, Europe, and the U.S. by 2030, and Henkel plans to source 100% of the electricity it uses for production from renewable sources. Amazon is making progress toward our own goal of 100% renewable energy by 2025, five years ahead of our initial 2030 target. Amazon is the largest corporate buyer of renewable energy in the world. We have 62 utility-scale wind and solar projects and 125 solar rooftops on fulfillment and sort centers around the globe. These projects have the capacity to generate over 6.9 gigawatts and deliver more than 20 million megawatt-hours of energy annually.

Transportation is a major component of Amazon's business operations and the toughest part of our plan to meet net-zero carbon by 2040. To help rapidly accelerate the market for electric vehicle technology, and to help all companies transition to greener technologies, we invested more than $1 billion in Rivian - and ordered 100,000 electric delivery vans from the company. We've also partnered with Mahindra in India and Mercedes-Benz in Europe. These custom electric delivery vehicles from Rivian are already operational, and they first hit the road in Los Angeles this past February. Ten thousand new vehicles will be on the road as early as next year, and all 100,000 vehicles will be on the road by 2030 - saving millions of metric tons of carbon. A big reason we want companies to join The Climate Pledge is to signal to the marketplace that businesses should start inventing and developing new technologies that signatories need to make good on the Pledge. Our purchase of 100,000 Rivian electric vans is a perfect example.

To further accelerate investment in new technologies needed to build a zero-carbon economy, we introduced the Climate Pledge Fund last June. The investment program started with $2 billion to invest in visionary companies that aim to facilitate the transition to a low-carbon economy. Amazon has already announced investments in CarbonCure Technologies, Pachama, Redwood Materials, Rivian, Turntide Technologies, ZeroAvia, and Infinium - and these are just some of the innovative companies we hope will build the zero-carbon economy of the future.

I have also personally allocated $10 billion to provide grants to help catalyze the systemic change we will need in the coming decade. We'll be supporting leading scientists, activists, NGOs, environmental justice organizations, and others working to fight climate change and protect the natural world. Late last year, I made my first round of grants to 16 organizations working on innovative and needle-moving solutions. It's going to take collective action from big companies, small companies, nation states, global organizations, and individuals, and I'm excited to be part of this journey and optimistic that humanity can come together to solve this challenge.

Differentiation is Survival and the Universe Wants You to be Typical
This is my last annual shareholder letter as the CEO of Amazon, and I have one last thing of utmost importance I feel compelled to teach. I hope all Amazonians take it to heart.

Here is a passage from Richard Dawkins' (extraordinary) book The Blind Watchmaker. It's about a basic fact of biology.

"Staving off death is a thing that you have to work at. Left to itself - and that is what it is when it dies - the body tends to revert to a state of equilibrium with its environment. If you measure some quantity such as the temperature, the acidity, the water content or the electrical potential in a living body, you will typically find that it is markedly different from the corresponding measure in the surroundings. Our bodies, for instance, are usually hotter than our surroundings, and in cold climates they have to work hard to maintain the differential. When we die the work stops, the temperature differential starts to disappear, and we end up the same temperature as our surroundings. Not all animals work so hard to avoid coming into equilibrium with their surrounding temperature, but all animals do some comparable work. For instance, in a dry country, animals and plants work to maintain the fluid content of their cells, work against a natural tendency for water to flow from them into the dry outside world. If they fail they die. More generally, if living things didn't work actively to prevent it, they would eventually merge into their surroundings, and cease to exist as autonomous beings. That is what happens when they die."

While the passage is not intended as a metaphor, it's nevertheless a fantastic one, and very relevant to Amazon. I would argue that it's relevant to all companies and all institutions and to each of our individual lives too. In what ways does the world pull at you in an attempt to make you normal? How much work does it take to maintain your distinctiveness? To keep alive the thing or things that make you special?

I know a happily married couple who have a running joke in their relationship. Not infrequently, the husband looks at the wife with faux distress and says to her, "Can't you just be normal?" They both smile and laugh, and of course the deep truth is that her distinctiveness is something he loves about her. But, at the same time, it's also true that things would often be easier - take less energy - if we were a little more normal.

This phenomenon happens at all scale levels. Democracies are not normal. Tyranny is the historical norm. If we stopped doing all of the continuous hard work that is needed to maintain our distinctiveness in that regard, we would quickly come into equilibrium with tyranny.

We all know that distinctiveness - originality - is valuable. We are all taught to "be yourself." What I'm really asking you to do is to embrace and be realistic about how much energy it takes to maintain that distinctiveness. The world wants you to be typical - in a thousand ways, it pulls at you. Don't let it happen.

You have to pay a price for your distinctiveness, and it's worth it. The fairy tale version of "be yourself" is that all the pain stops as soon as you allow your distinctiveness to shine. That version is misleading. Being yourself is worth it, but don't expect it to be easy or free. You'll have to put energy into it continuously.

The world will always try to make Amazon more typical - to bring us into equilibrium with our environment. It will take continuous effort, but we can and must be better than that.

* * *

As always, I attach our 1997 shareholder letter. It concluded with this: "We at Amazon.com are grateful to our customers for their business and trust, to each other for our hard work, and to our shareholders for their support and encouragement." That hasn't changed a bit. I want to especially thank Andy Jassy for agreeing to take on the CEO role. It's a hard job with a lot of responsibility. Andy is brilliant and has the highest of high standards. I guarantee you that Andy won't let the universe make us typical. He will muster the energy needed to keep alive in us what makes us special. That won't be easy, but it is critical. I also predict it will be satisfying and oftentimes fun. Thank you, Andy.

To all of you: be kind, be original, create more than you consume, and never, never, never let the universe smooth you into your surroundings. It remains Day 1.

Sincerely,

Jeffrey P. Bezos
Founder and Chief Executive Officer
Amazon.com, Inc.

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Thu, 15 Apr 2021 09:49:06 +0000 BlogLikes - Find Most Popular Blogs Tech Insider Markets Amazon Shareholders Jeff Bezos Joy Covey Retail eCommerce
Amazon announces $250 million venture fund for Indian startups http://feedproxy.google.com/~r/Techcrunch/~3/1jwy72OPkco/ Amazon on Thursday announced a $250 million venture fund to invest in Indian startups and entrepreneurs focusing on digitization of small and medium-sized businesses (SMBs) in the key overseas market.

The announcement comes at a time when the American e-commerce group, which has previously invested over $6.5 billion in its India business, faces heat from government bodies, and the small and medium-sized businesses that it purports to serve.

Through the new venture fund, called Amazon Smbhav Venture Fund, Amazon said it wants to invest in startups that focus on helping small businesses come online, sell online, automate and digitize their operations, and expand to customers worldwide.

Agriculture and healthcare are two additional areas Amazon is focusing on with its new venture fund, but it said it is open to looking at tech startups from other sectors if their work intersects with SMBs.

In the agri-tech sector, Amazon is looking to invest in Indian startups that are using technology to make agri-inputs more accessible to farmers, provide credit and insurance to farmers, reduce food wastage, and improve the quality of produce to consumers. In the healthcare sector, Amazon said it will invest in startups that are enabling healthcare providers to leverage telemedicine, e-diagnosis, AI powered treatment recommendations.

The announcement was made at Amazon’s annual event, called Sambhav, that focuses on India-based SMBs. At the virtual event, Amazon also unveiled ‘Spotlight North East’, an initiative to bring 50,000 artisans, weavers and small businesses online from the eight states in the North East region of India by 2025 and to boost exports of key commodities like tea, spices and honey from the region.

In the first edition of Sambhav last year, Amazon announced it would be investing $1 billion to help digitize 10 million small and medium sized businesses. Amazon said earlier this month that it had created 300,000 jobs in India since January 2020, and enabled exports for Indian-made goods worth $3 billion.

The company said more than 50,000 offline retailers and neighborhood stores — called kirana locally — are using Amazon marketplace and about 250,000 new sellers have also joined the platform. The company said today it aims to onboard 1 million offline retailers and neighbourhood stores by 2025 through the Local Shops on Amazon program.

Not far from Sambhav’s first event last year, which was attended by Amazon chief executive and founder Jeff Bezos, tens of thousands of protesters marched on the street and expressed their concerns about what they alleged was unfair practices employed by Amazon to crush them.

A similar protest was seen today. You can hear some of their stories here. It’s an ongoing challenge for Amazon, which has long struggled to stay out of controversy in India.

An influential India trader group that represents tens of millions of brick-and-mortar retailers called New Delhi to ban Amazon in the country in February this year after a report claimed that the American e-commerce group had given preferential treatment to a small group of sellers in India, publicly misrepresented its ties with those sellers and used them to circumvent foreign investment rules in the country.

The Confederation of All India Traders (CAIT) “demanded” serious action from the Indian government against Amazon following revelations made in a Reuters story. “For years, CAIT has been maintaining that Amazon has been circumventing FDI [Foreign Direct Investment] laws of India to conduct unfair and unethical trade,” it said.

Several international technology giants including Google, Facebook, and Microsoft have invested in Indian startups in recent years. Amazon, too, has backed a number of firms including ride-hailing startup Shuttl, and consumer brand MyGlamm. Last month, it acquired retail startup Perpule for about $20 million.

Amazon’s fresh $1B investment in India is not a big favor, says India trade minister

]]> Thu, 15 Apr 2021 08:07:39 +0000 BlogLikes - Find Most Popular Blogs Asia eCommerce Amazon Amazon India India Brazil’s Answer to Amazon Develops a Mobile Feature to Shop Inside Songs http://feedproxy.google.com/~r/Adfreak/~3/EhNnLxWMl0A/ ]]> Wed, 14 Apr 2021 16:28:06 +0000 BlogLikes - Find Most Popular Blogs Audio & Podcasting Ecommerce Grocery startup Mercato spilled years of data, but didn’t tell its customers http://feedproxy.google.com/~r/Techcrunch/~3/UZil4x22dco/ A security lapse at online grocery delivery startup Mercato exposed tens of thousands of customer orders, TechCrunch has learned.

A person with knowledge of the incident told TechCrunch that the incident happened in January after one of the company’s cloud storage buckets, hosted on Amazon’s cloud, was left open and unprotected.

The company fixed the data spill, but has not yet alerted its customers.

Mercato was founded in 2015 and helps over a thousand smaller grocers and specialty food stores get online for pickup or delivery, without having to sign up for delivery services like Instacart or Amazon Fresh. Mercato operates in Boston, Chicago, Los Angeles, and New York, where the company is headquartered.

TechCrunch obtained a copy of the exposed data and verified a portion of the records by matching names and addresses against known existing accounts and public records. The data set contained more than 70,000 orders dating between September 2015 and November 2019, and included customer names and email addresses, home addresses, and order details. Each record also had the user’s IP address of the device they used to place the order.

The data set also included the personal data and order details of company executives.

It’s not clear how the security lapse happened since storage buckets on Amazon’s cloud are private by default, or when the company learned of the exposure.

Companies are required to disclose data breaches or security lapses to state attorneys-general, but no notices have been published where they are required by law, such as California. The data set had more than 1,800 residents in California, more than three times the number needed to trigger mandatory disclosure under the state’s data breach notification laws.

It’s also not known if Mercato disclosed the incident to investors ahead of its $26 million Series A raise earlier this month. Velvet Sea Ventures, which led the round, did not respond to emails requesting comment.

In a statement, Mercato chief executive Bobby Brannigan confirmed the incident but declined to answer our questions, citing an ongoing investigation.

“We are conducting a complete audit using a third party and will be contacting the individuals who have been affected. We are confident that no credit card data was accessed because we do not store those details on our servers. We will continually inform all authoritative bodies and stakeholders, including investors, regarding the findings of our audit and any steps needed to remedy this situation,” said Brannigan.

How to respond to a data breach


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Wed, 14 Apr 2021 16:20:05 +0000 BlogLikes - Find Most Popular Blogs eCommerce Food Security Amazon Boston California Chicago Cloud Computing Cloud Infrastructure Cloud Storage Computer Security Computing Data Breach Data Security Instacart Los Angeles Mercato New York Technology United States Velvet Sea Ventures
Kroger launches its first Ocado-powered ‘shed’, a massive, robot-filled fulfillment center in Ohio http://feedproxy.google.com/~r/Techcrunch/~3/oxf9qzDvsMs/ After inking a deal to work together almost three years ago, U.S. supermarket chain Kroger and U.K. online grocer Ocado today took the wraps off the first major product of that deal. Kroger has launched a new Ocado-powered customer fulfillment center in Monroe, Ohio, outside of Cincinnati, a gigantic warehouse covering 375,000 square feet and thousands of products for packing and delivering Kroger orders from online shoppers.

Built with a giant grid along the floor, “the shed”, as Ocado calls its warehouses, will feature some 1,000 robots alongside 400 human employees to pick, sort and move around items. It is expected to process as much as $700 million in sales annually, the sales of 20 brick-and-mortar stores.

Those orders, in turn, will be delivered in temperature-controlled Kroger Delivery vans, built on the model of Ocado’s vans in the US and able to store up to 20 orders. These will also be run using Ocado software, mapping algorithms to optimize deliveries along the fastest and most fuel-efficient routes.

The partnership was a long time in the making but the focus on what has come out of it is probably at its keenest right now, given the huge boost online shopping has had in the past year. The Covid-19 pandemic, and the resulting push for more social distancing, has driven a lot of people to the internet to shop, opting for deliveries over physical store visits for some or all of their food and other weekly essentials.

In call today with journalists, Rodney McMullen, Kroger’s chairman and CEO, said that delivery had grown 150% for Kroger last year. While some of that may well melt back into physical shopping as and when Covid-19 cases wane (fingers crossed), many in the industry believe that the genie has been let out of the bottle, so to speak: many consumers introduced to shopping online will stay, at least in part, and so this is about building infrastructure to meet that new demand.

(And there is some data that backs that up: Ocado CEO and co-founder Tim Steiner noted that at Ocado, pre-pandemic the average order value for the company was £105 ($144). That grew to £180 last year, and are at £120.)

Kroger, like many brick-and-mortar players, has been building out multiple fronts in its digital strategy. Alongside Ocado, the company has also been investing in technology to boost the efficiency of its in-store operations (for example by working with companies like Shelf Engine), and it has a grocery delivery partnership with Instacart.

That partnership with Instacart will remain in place, not least because it covers a much wider geography than the Ocado approach, which is live now in Cincinnati, and sounds like it will also expand to Florida. While Kroger today said that CFCs will vary in size and be built on the concept of “modules” (the Monroe facility is built on seven modules), this is still a capital intensive approach compared to the Instacart model, so might overall face a slower rollout and perhaps only make sense in Kroger’s denser markets.

“The two partnerships are critical to Kroger and our customers,” said Yael Cosset, Kroger’s CIO, in the call today. “We expect to work very closely in strategic partnership with Instacart and with Ocado.”

Ocado, an early player that started out in the UK back in 2000, is seen by many as the industry standard for how to build and run an online-only grocery business.

The company has been expanding its reach by way of taking the technology that it has built for itself and turning it into a product — a process that is still very much in development, with the company working now on robotic pickers and other autonomous systems, along with other technology to power and make its delivery service more efficient.

Ocado’s “AWS” strategy of turning tech that it has built for itself into a product to sell to others has born fruit: it now has partnerships to power online grocery services, and specifically fulfillment centers, in Japan (with Aeon), France (with Casino) and Canada (with Sobeys). That means the Kroger rollout is now a tested model, but it’s still a very notable move for the company to break into the U.S. while at the same time giving Kroger a much-needed bit of infrastructure to better compete with bigger players in the country like Walmart and Amazon.

In that regard, it will be interesting to see how and if Kroger leverages its much bigger Ocado-powered infrastructure for its other projects. The company is to develop its own marketplace for third-party retailers, going head to head with similar offerings from — yes — Amazon and Walmart.

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Wed, 14 Apr 2021 14:48:34 +0000 BlogLikes - Find Most Popular Blogs eCommerce Europe Food Grocery Kroger Ocado
Sunday raises $24 million seed round to build a fast restaurant checkout flow http://feedproxy.google.com/~r/Techcrunch/~3/SofNN-3pxmU/ Meet Sunday, a new startup that is going to attract some headlines as it has raised a $24 million seed round at a $140 million post-money valuation. That’s a lot of money for a company that started just a few months ago but that’s because Sunday wants to move quickly.

Sunday is getting noticed because it is founded by Victor Lugger, Tigrane Seydoux and Christine de Wendel — Lugger and Tigrane have been working together for several years as they’re the founders of Big Mamma. Christine de Wendel headed Zalando in France before joining ManoMano as COO.

If you’re not familiar with Big Mamma, they’ve launched a dozen Italian restaurants in France. They also manage La Felicità, the food court at Station F.

Some people love those restaurants because the food is good and it’s relatively affordable. Some people hate it because Big Mamma is also particularly well known for its long queues and the fact that you always feel like you have to eat quickly for the next group. But it’s clear that it’s been working well for the past few years.

Managing Big Mamma during a pandemic led to Sunday, a spin-off company incorporated in the U.S. The restaurant company wanted to offer a way to check the menu and pay without touching anything. Like many restaurants, they put QR codes on the tables to that customers can scan them with their phones and load a website.

But Sunday didn’t stop at the menu as it also connects directly to the cash register system. Sunday supports Oracle Micros, Brinks, Tiller, Zelty, Revo, CashPad, etc. This way, clients can also scan the QR code, check their tab and pay directly from their phone. When they’re done eating, they can pay by themselves, stand up and leave.

After trying Sunday in Big Mamma restaurants, the company saw some encouraging results. 80% of customers chose to pay using the QR code, which means that restaurants saved 15 minutes in wait time on average leading to a better table turnover rate.

And this is key to understanding Sunday. It’s easy to sell a new payment system to a restaurant if it leads to more revenue. Popular restaurants that feel like they’re always looking for empty tables could greatly benefit from Sunday.

It also opens up some new possibilities. For instance, guests can split the bill directly at the table — everyone loads up Sunday and pay. Sunday is based on QR codes right now, but the company isn’t attached to QR codes specifically. You could imagine loading your bill using RFID chips, a tablet, etc.

The vision is clear — Sunday wants to build the Fast Checkout of restaurants. The startup thinks online checkout is going to merge with offline, brick-and-mortar checkout.

Fast raises $102M as the online checkout wars continue to attract huge investment

Sunday customers don’t pay any monthly subscription fee or setup fee. You only pay processing fees based on usage. And those fees tend to be lower than the card machine you’re currently using.

The startup’s seed round was led by Coatue with New Wave participating. New Wave is a new European seed fund led by Pia d’Iribarne and backed by Xavier Niel. Multiple hospitality and tech investors are also participating.

The idea is to raise a lot of money, sign up a lot of restaurants and take over the market right now while there’s an opportunity during the pandemic. They have hired 40 people already and they’re signing deals with restaurants even though most of them are still closed in Europe.

Sunday isn’t a tech achievement per se — it’s an execution play. The company that can roll out this kind of checkout experience faster than the others is going to take over the market.

When restaurants are going to be open again, you may notice Sunday QR codes in France at Eataly, PNY, Paris Society, Eric Frechon, Groupe Bertrand’s restaurants (Burger King France, Hippopotamus, Groupe Flo…). Similarly, in the U.K., Sunday is partnering with JKS Group (Hoppers, Brigadiers, Gymkhana…), Corbin & King and others. Sunday is also talking with companies in the U.S. and Spain.

Overall, there are more than a thousand restaurants currently adopting Sunday.

“We follow the same model as the one we used when launching restaurants with Big Mamma. Seven years ago, we invested three times more than the others to compress fixed costs and deliver a better product,” Sunday co-founder and CEO Victor Lugger told me.

The startup already has an ambitious product roadmap. Eventually, you could imagine having your own Sunday account that remembers your past bills, tracks your allergies, saves your favorite payment method, etc. Once again, it’ll come down to execution.

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Wed, 14 Apr 2021 10:08:15 +0000 BlogLikes - Find Most Popular Blogs eCommerce Europe Fundings & Exits Startups Checkout France Newsletter Payment Sunday
eBay Hits the Road to Authenticate High-Value Collectibles http://feedproxy.google.com/~r/Adfreak/~3/D5mRHWBTyZs/ ]]> Tue, 13 Apr 2021 15:09:44 +0000 BlogLikes - Find Most Popular Blogs Ecommerce Ebay Advertising Atlanta Austin Road Briefly Authenticate High Value Collectibles Nashville Seattle Las Vegas Bloomscape’s Justin Mast explains how he built a thriving garden startup in Detroit http://feedproxy.google.com/~r/Techcrunch/~3/t3UP2dAe-sA/ Justin Mast has a simple reason for starting his plant retail startup Bloomscape in Detroit.

“This is home,” he told me. “This is where I have a really strong network and I knew I’d be able to find a lot of support.”

Mast didn’t grow up in Detroit proper, but he’s from Grand Rapids, Michigan’s second largest city. He recalled a weekend in Detroit after finishing graduate school at the University of Michigan in Ann Arbor, when he was “totally blown away” by the city’s energy.

And when it came time to launch Bloomscape in 2018, Mast said it made sense to do so from Detroit because of Michigan’s “strong heritage in the horticulture industry” — in floriculture, for example, it ranks as one of the biggest producers in the United States.

That heritage isn’t abstract to him. Mast said his family has been involved in the industry for five generations on his father’s side (including three generations in the Netherlands) and three generations on his mother’s. He worked in the family greenhouse as a child and even starting a roadside plant stand.

Bloomscape

Image Credits: Bloomscape

“This was my version of a lemonade stand,” he said — albeit a lemonade stand that became popular enough that Mast needed to recruit his siblings for help, and that eventually provided him with enough money to buy a used car.

Bloomscape launched in 2018, and Mast said that from the beginning, the startup’s advantage was “to really know the ins and outs of the business.” That allowed Bloomscape to ship larger plants (like birds of paradise and Chinese fan palms), and more recently to expand with outdoor plants and garden “bloom kits.”

“By focusing on one of the least glamorized parts of this industry, the supply chain, we are able to design this process for shipping larger plants, at scale, throughout the country,” he said. “We’re shipping out tropical plants in the dead of winter, thousands of times a week, with a real high level of consistency. We know the plants really well, we how they perform, how they move through a supply chain, we know the nuances of FedEx and UPS, we know what growers are growing quality product.”

Bloomscape has raised a total of $24 million, most recently in a Series B last fall led by General Catalyst, with participation from Annox Capital’s Bob Mylod, Home Depot board member Jeff Boyd, former Seventh Generation and Burt’s Bees CEO John Replogle and existing investors Revolution Ventures and Ludlow Ventures.

Bloomscape

Bloomscape bloom kits

When I asked whether investors had ever pressured him to move the startup to Silicon Valley, Mast said, “We’ve had successful funding rounds, but even in most successful rounds, not everyone’s going to be the right fit.” So it sounds like the issue came up, but Mast made sure that everyone who actually invested saw the startup’s location as an advantage, or at least “if they saw it as a disadvantage, they were willing to overlook it.”

Online garden shop Bloomscape raises $15M Series B, acquires plant care app Vera

Nor has the location proven to be an issue when it comes to hiring. Mast said the company successfully lured Aaron Averbuch (formerly based in Seattle and a vice president of engineering at Placed and Snap) to Detroit to become CTO. He also noted that Detroit is close to the University of Michigan, and that “all the schools in Chicago and Pittsburgh are within a few hours’ drive.”

Mast added that the last six months have been “a particularly exciting time” to run a startup in Detroit, with the success of companies like StockX, Floyd and Autobooks.

“We’re thrilled to be here,” he said.

 

 

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Tue, 13 Apr 2021 09:30:59 +0000 BlogLikes - Find Most Popular Blogs Startups TC Ecommerce Tech Chicago United States Netherlands Plants Michigan Seattle Detroit Revolution Ventures Seventh Generation Cto Pittsburgh University Of Michigan Ann Arbor Burt Grand Rapids Michigan Mast Autobooks John Replogle Bloomscape Justin Mast Jeff Boyd City Spotlight Detroit City Spotlight Annox Capital 's Bob Mylod Home Depot Ludlow Ventures Bloomscape Silicon Valley Mast Aaron Averbuch StockX Floyd
Berlin Brands Group raises $240M to buy and scale up third-party Amazon Marketplace brands http://feedproxy.google.com/~r/Techcrunch/~3/LbO08tLfjLk/ The race is on for companies building e-commerce empires by rolling up smaller, promising businesses that sell via Amazon and other marketplaces and growing by using some economies of scale to operate them as one. In the latest development, Berlin Brands Group has raised $240 million that it says it will be using to acquire smaller but promising enterprises in Europe and North America — specifically the U.S. — that are already making between $1 million and $100 million in sales via marketplaces like Amazon.

The funding is coming in the form of debt, not equity, and it is coming specifically from UniCredit, Deutsche Bank and Commerzbank, BBG founder and CEO Peter Chaljawski said in an interview. BBG is profitable and earlier this year it committed more than $300 million off its balance sheet for buying up and operating companies, and so with this debt round (which we reported earlier this year was in the works), it now has $540 million for that purpose.

“We’re in a wonderful situation with a proven business model, and this is the cheapest money you could get,” he said of the decision to go for debt, a choice often made by startups that are in capital-intensive modes but either reluctant or do not need to give up equity to raise capital to scale if they are generating cash. In the case of BBG it’s the latter, since the company is profitable. “This is better than equity. BBG does not have any debt as of 2020, and we had cash on hand for our first acquisitions, 20 brands that we bought in cash from our balance sheet. Now we want to accelerate that even more.”

Chaljawski said that BBG may well tap an equity round in the near future to bring on investors to shape its own growth and set a valuation for the company. (For a point of comparison, competitors like Thrasio are now valued in the multiple billions of dollars.)

BBG has to date mostly built its business around starting up and scaling its own in-house brands that sell on Amazon and elsewhere — starting first with home audio equipment, coming out of Chaljawski’s own interests in sound technology from a previous life as a budding dance music DJ. Its brands include Klarstein (kitchen appliances), auna (home electronics and music equipment), Capital Sports (home fitness) and blumfeldt (garden).

In a big move to scale and build out what it’s established itself, last year BBG shifted over to the roll-up model: leveraging a more buying power to cut better deals with manufacturers and other suppliers, consolidating some of the other functions like marketing, and providing a more comprehensive set of analytics around what is selling best, who is buying, how best to market an item, and more. It says it has 1.3 million square feet of warehouse space in Europe, Asia and the U.S. and is one of the biggest Amazon sellers in Europe today.

The basic idea of rolling up businesses that sell on the Amazon platform with FBA ( Fulfillment by Amazon ) has been around for years in fact, but the notable and more recent shift is that it has taken on a startup profile in part because of how some of the latest entrants are leveraging big data analytics, the latest innovations in manufacturing and logistics technology and a founder-led, e-commerce ethos to grow the model.

“Without data, you would go nowhere in this business,” Chaljawski said. “But on top of that, there is something you can’t pull from market data — a toolbox of manufacturing and engineering expertise that we use to evaluate products.” He says that BBG’s data scientists build algorithms that millions of products, and hundreds of thousands of sellers, to produce the data that it uses both to source potential acquisitions and to run the business.

U.S. players like Thrasio — which itself closed a $1.2 billion Series C for the same purposes: rolling up and scaling — have led the charge. But in recent months we’ve seen a number of others also move into the space, buoyed by hundreds of millions of dollars in funding from investors very keen to ride the e-commerce wave and the vision of tapping into some of the economies of scale and the marketplace model that have been such a juggernaut for Amazon.

It’s a two-sided marketplace, and Amazon has focused primarily on earning money from operating the marketplace itself and sales to consumers, so that leaves a huge opportunity on the table for someone else (or as it happens, many others) to tackle the opportunity to address the needs and services of the other side of that marketplace: the sellers.

In addition to BBG and Thrasio, others in the same space include Branded, which earlier this year; SellerXHeydayHeroesPerch, among several others. Even removing the very-highly capitalized Thrasio and BBG from the equation, these companies have collectively raised or committed from their own balance sheets hundreds of millions of dollars to buy up small but promising third-party merchants.

If that sounds like a crowded market, well, it probably is. These are also startups, after all, and so the chances that some of these roll-up consolidators will not be that skilled at running multiple companies — with their disparate supply chains, customer bases, replacement cycles and marketing strategies — are as risky as in any other area of e-commerce startup interest.

On the other hand, though, there are a lot of opportunities to play for here.

By one estimate, there are about 5 million third-party sellers on Amazon today, a number that appears to be growing exponentially, with more than 1 million sellers joining the platform in 2020 alone. Out of those, Thrasio estimates that there are probably 50,000 businesses selling on the Amazon platform with FBA (Fulfillment by Amazon) that are making $1 million or more per year in revenues.

We have pointed out before that within that bigger number of merchants, there are a huge amount of clones and companies of questionable quality. What is interesting is that there are distinct companies, built around more originality and flair, swimming in that sea: some of them have broken through and floated, while others that have not.

So for a company like BBG, the opportunity lies in the fact that for many of these smaller but promising merchants, they have not been built with longer-term growth visions in place. The merchants might not be prepared for the kind of scaling, investment or operational commitment that would need to be made to keep their businesses going, or they simply don’t have the appetite for it. BBG’s selling point — as it is with others in this space — is that they do.

And BBG’s added pitch is that they can help open another door, to Europe. In the region, Amazon on average has about a 10% market share of marketplaces, BBG estimates, with regional players accounting for more marketplace activity than in the U.S. BBG not only has the links into selling on these other marketplaces, but the promise is that it can help improve how a brand will sell on Amazon itself in the region, given its traction in the market already. Conversely, it hopes to do the same for European brands by giving them a better window into selling in the U.S.

Chaljawski is however realistic about the profusion of companies like his, and is “sure” there will be some casualties down the road. He also believes that we may start to see some emerge around specific verticals as an alternative.

“Yes, I’m sure consolidation will happen, but I also think that we’ll see some specialization, with roll-ups focusing on one vertical or another. I think it will be a mix,” he said.

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Tue, 13 Apr 2021 04:13:35 +0000 BlogLikes - Find Most Popular Blogs Amazon Ecommerce Europe Tech North America Amazon Fulfillment FBA Europe Asia BBG Amazon Marketplace Roll Up KLARSTEIN Thrasio Berlin Brands Group Peter Chaljawski Chaljawski SellerX Heyday Heroes Perch Fulfilment By Amazon UniCredit Deutsche Bank Commerzbank BBG U S BBG
Grover raises $71M to grow its consumer electronics subscription business http://feedproxy.google.com/~r/Techcrunch/~3/QwgIqVw9VJU/ A startup tapping into the concept of the circular economy, where people don’t buy items outright but pay an incremental amount to use them temporarily, has raised some funding to scale its business in Europe and beyond. Grover, a Berlin-based startup that runs a subscription model where people can rent out consumer electronics like computers, smart phones, games consoles and scooters for set fees, has picked up €60 million ($71 million).

The funding is coming in the form of €45 million in equity and €15 million in venture debt.

The company, which as of September last year had 100,000 subscriptions and now has around 150,000, said it aims to triple its active users by the end of this year to 450,000 by the end of 2021. It will be using the funds both to expand to more markets: both to grow its business in Germany, Austria and the Netherlands (where it’s already operating) and to launch in Spain and the US, and to add in more product categories into the mix, including  health and fitness devices, consumer robots and smart appliances.

And, it plans to invest in more innovation around its rental services. These have seen a new wave of interest in particular in the past year of pandemic life, which has put a strain on many people’s finances; definitely made it harder to plan for anything, including what gadgets you might need one week or the next; and turned the focus for many people on consuming less, and getting more mileage out of what they and others already have.

“Now more than ever, consumers value convenience, flexibility and sustainability when they shop for and use products. This is especially true when it comes to technology and all of the possibilities that it has to offer — whether that’s productivity, fun, or staying in touch with our loved ones,” said Michael Cassau, CEO and founder of Grover, in a statement. “The fresh funding allows us to bring these possibilities to even more people across the world. It enables us to double down on creating an unparalleled customer experience for our subscribers, and to push the boundaries of the most innovative ways for people and businesses to access and enjoy technology. The strong support from our investors confirms not only the important value our service brings to people, but also Grover’s vast growth potential. We’re still just scratching the surface of a €1 trillion global market.”

JMS Capital-Everglen led the Series B equity round, with participation also from Viola Fintech, Assurant Growth, existing investors coparion, Augmentum Fintech, Circularity Capital, Seedcamp and Samsung Next, and unnamed founders and angel investors from Europe and North America, among others. Kreos Capital issued the debt.

Samsung is a strategic investor: together with Grover it launched a subscription service in December that currently covers select models from its S21 series. “Samsung powered by Grover,” as it’s called, has started out out in Germany, so one plan may be to use some of this investment to roll that out to other markets.

The funding is coming on the heels of a year when Berlin-based Grover said its business grew 2.5x (that is, 150%). Its most recent annual report noted that it had 100,000 active users as of September of last year, renting out 18,000 smartphones, 6,000 pairs of AirPods and over 1,300 electric scooters in that period. It also said that in the most recent fiscal year, it posted net revenues of about $43 million, with $71 million in annual recurring revenue, and tipping into profitability on an Ebitda basis.

It raised €250 million ($297 million) in debt just before the start of the pandemic, and previously to that also raised a Series A of $44 million in 2018, and $48 million in 2019 in a combination of equity and debt in a pre-Series B. It’s not disclosing its valuation.

The company’s service falls into a wider category of startups building services around the subscription economy model, which has touched asset-intensive categories like cars, but also much lighter, internet-only consumables like music and video streaming.

Indeed, Grover has been regularly referred to as the “Netflix for gadgets,” in part a reference to the latter company’s history starting out by sending out physical DVDs to people’s homes (which they returned when finished to get other films under a subscription model).

Similar to cars and films, there is definitely an argument to be made for owning gadgets on a subscription. The pricier that items become — and the more of them that there are battling for a share of consumer’s wallets against many of the other things that they can spend money to own or use — the less likely it is that people will be completely happy to fork out money or build in financing to own them, not least because the value of a gadget typically depreciates the minute a consumer does make the purchase.

At the same time, more consumers are subscribing, and often paying electronically, to services that they use regularly: whether it’s a Prime subscription, or Spotify, the idea with Grover — and others that are building subscriptions around physical assets — is to adopt the friction-light model of subscribing to a service, and apply it to physical goods.

And for retailers, it’s another alternative to offer customers — alongside buying outright, using credit, or offering by-now-pay-later or other kinds of financing, in order to close a deal. Shopping cart abandonment, and competition for shoppers online, are very real prospects, so anything to catch incremental wins, is a win. And if they are working in a premium (cost-per-month of use, say) to give customers possession of the gadget in question, if they manage to secure enough business this way, it actually might prove to be even more lucrative than outright sales, especially if the maintenance of those goods is offloaded to a third party like Grover.

Although some people have regularly been wary of the idea of used consumer electronics, or other used goods, that has been shifting. There have been a number of companies seeing strong growth in the last year on the back of helping consumers resell their own items. This has been helped in part by buyers being more focused on spending less (and sellers maybe earning back some money in the process), but also being keen to reduce their own footprints in the world by using items that are already out in circulation. In Europe alone, last week, Brighton-based MPB raised nearly $70 million for its used-camera equipment marketplace. Other recent deals have included used-goods marketplace Wallapop in Spain raising $191 million and clothing-focused Vestiaire Collective raising $216 million.

What is interesting here is — whether it’s a sign of the times, or because Grover might have cracked the subscription model for gadgets — the company seems to be progressing in an area that has definitely seen some fits and bumps over the years.

Lumoid out of the U.S. also focused on renting out tech gear but despite finding some traction and inking a deal with big box retailer Best Buy, it failed to raise the funding it needed to run its service and eventually shut down.  It’s also not alone in trying to tackle the market. Others in the same space include Tryatec and Wonder, which seems to be focused more on trying out technology from startups.

The big question indeed is not just whether Grover will find more of a market for its rental/subscription model, but also whether it has cracked those economics around all of the supply chain management, shipping and receiving goods, reconditioning or repairing when needed, and simply keeping strong customer service throughout all of that. As we’ve seen many times, a good idea on one level can prove extremely challenging to execute on another.

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Tue, 13 Apr 2021 02:32:04 +0000 BlogLikes - Find Most Popular Blogs Gadgets Ecommerce Europe Germany Berlin Funding US Samsung Tech Spain Netflix Netherlands Brighton North America Lumoid Kreos Capital Mpb Germany Austria Grover Wallapop Michael Cassau JMS Capital Everglen Viola Fintech Assurant Tryatec
Amazon Adds Aplenty to Its Growing List of Private-Label Brands http://feedproxy.google.com/~r/Adfreak/~3/JvAXmXJLPxQ/ ]]> Mon, 12 Apr 2021 17:25:55 +0000 BlogLikes - Find Most Popular Blogs Amazon Ecommerce California Advertising Illinois Branding Food & Beverage Amazon Fresh Consumer Product Innovation CPG & Grocery Briefly From pickup basketball to market domination: My wild ride with Coupang http://feedproxy.google.com/~r/Techcrunch/~3/Qb6qDa7x8IE/ Share on Twitter Ben Sun is co-founder and general partner at Primary Venture Partners, a seed-stage VC firm based in NYC.

A month ago, Coupang arrived on Wall Street with a bang. The South Korean e-commerce giant — buoyed by $12 billion in 2020 revenue — raised $4.55 billion in its IPO and hit a valuation as high as $109 billion. It is the biggest U.S. IPO of the year so far, and the largest from an Asian company since Alibaba’s.

But long before founder Bom Kim rang the bell, I knew him as a fellow founder on the hunt for a good idea. We stayed in touch as he formed his vision for what would become Coupang, and I built it alongside him as an investor and board member.

As a board member, I’ve observed a brief quiet period following the IPO. But now I want to share how exactly our paths intersected, largely because Bom exemplifies what founders should aspire to and should seek: big risks, dogged determination, and obsessive responsiveness to the market.

Bom fearlessly turned down an acquisition offer from then-market-leader Groupon, ferociously learned what he didn’t know, made a daring pivot even after becoming a billion-dollar company, and iteratively built a vision for end-to-end market dominance.

Why I like talking to founders early

In 2008, I met Bom while playing a weekend game of pickup basketball at Stuyvesant High School. We realized we had a mutual acquaintance through my recently-sold startup, Community Connect Inc. He told me about the magazine he had sold and his search for a next move. So we agreed to meet up for lunch and go over some of his ideas.

To be honest, I don’t remember any of those early ideas, probably because they weren’t very good. But I really liked Bom. Even as I was crapping on his ideas, I could tell he was sharp from how he processed my feedback. It was obvious he was super smart and definitely worth keeping in touch with, which we continued to do even after he relocated to go to HBS.

I soon began investing in and incubating businesses, starting mostly with my own capital. When I got a call from an executive recruiter working for a company in Chicago called Groupon — who told me they were at a $50 million run rate in only a few months — I became fascinated with their model and started talking to some of the investors, former employees, and merchants.

Inspired, and as a new parent, I decided to launch a similar daily-deal business for families: Instead of skydiving and go-kart racing, we offered deals on kids’ music classes and birthday party venues. While I was working on this idea, John Ason, an angel investor in Diapers.com, said I should meet with the founder and CEO Marc Lore. By the end of the meeting, Marc and I etched a partnership to launch DoodleDeals.com co-branded with Diapers.com. The first deal did over $70,000 — great start.

I’ve observed a brief quiet period following the IPO. But now I want to share how exactly our paths intersected, largely because Bom exemplifies what founders should aspire to and should seek: big risks, dogged determination, and obsessive responsiveness to the market.

All that time, I kept in touch with Bom. In February 2010, we were catching up over lunch at the Union Square Ippudo, and he asked if I had heard of Buywithme, a Boston-based Groupon clone. He hadn’t yet heard about Groupon, so I explained the business model and shared the numbers. He thought something similar might transfer well to South Korea, where he was born and his parents still lived.

This kind of conversation is exactly why I love working with founders early, even before the idea forms: You learn a lot about them as they explore, wrestle with uncertainty, and eventually build conviction on a business they plan to spend the next decade-plus building. Ultimately, success comes down to founders’ belief in themselves; when you develop the same belief in them as an investor, it is pretty magical. I was starting to really believe in Bom.

The idea gets real — and moves fast

I’m not Korean — I am ethnically Chinese — so Bom put together slides on the Korean market and why it was perfect for the daily-deal model. In short: a very dense population that’s incredibly online. Image Credits: Ben Sun

I told Bom he should drop out of business school and do this. He said, “You don’t think I can wait until I graduate?” I responded, “No way! It will be over by then!”

First-mover advantage is real in a business like this, and it didn’t take Bom long to see that. He raised a small $1.3 million seed round. I invested, joined the board. Because of my knowledge of the deals market and my entrepreneurial experience, Bom asked me to get hands-on in Korea — not at all typical for an investor or even a board member, but I think of myself as a builder and not just a backer, and this is how I wanted to operate as an investor.

Once he realized time was of the essence, Bom was heads down. For context, he was engaged to his longtime girlfriend, Nancy, who also went to Harvard undergrad and was a successful lawyer. Imagine telling your fiancée, “Honey, I am dropping out of business school, moving to Korea to start a company. I will be back for the wedding. Not sure if I will ever be coming back to the U.S.”

I emailed Bom, saying: “Bom — honestly as a friend. Enjoy your wedding. It is a real blessing that your fiancée is being so supportive of you doing this. Launching a site a few weeks before the wedding is going to be way too distracting and she won’t feel like your heart is in it. Launching a few weeks later is not going to make or break this business. Trust me.”

Bom didn’t listen. He launched Coupang in August 2010, two weeks before the wedding. He flew back to Boston, got married, and — running on basically no sleep — sneaked out for a 20-minute nap in the middle of his reception. Right after the wedding, he flew back to Seoul. Nancy has to be one of the most supportive and understanding partners I have ever seen. They are now married and have two kids.

Jumping on new distribution, turning down an acquisition offer ]]>
Mon, 12 Apr 2021 17:01:41 +0000 BlogLikes - Find Most Popular Blogs TC Ecommerce Column Asia South Korea Ipo Boston Softbank Groupon Tech E-commerce Chicago Harvard Alibaba Korea Coupang Nancy Livingsocial Marc HBS Stuyvesant High School Primary Venture Partners SoftBank Vision Fund Ben Sun John Ason BOM Bom Kim EC Column EC Ecommerce and D2C EC Consumer Applications Community Connect Inc Union Square Ippudo Buywithme Seoul Nancy
Tiger Global leads $100 million investment in Indian social commerce DealShare http://feedproxy.google.com/~r/Techcrunch/~3/4olOeYa3tK8/ Tiger Global has invested in DealShare, a startup in India that has built an e-commerce platform for middle and lower-income groups of consumers, just three months after the Indian firm .

The New York-headquartered firm has led the $100 million Series D round in three-year-old social commerce startup DealShare, two people familiar with the matter told TechCrunch. Tiger Global declined to comment, and a founder of the Indian startup didn’t return an email sent on Sunday.

kickstarted its journey the day Walmart acquired Flipkart, the startup’s founder and chief executive Vineet Rao said at a virtual conference late last year. Rao said that even as Amazon and Flipkart had been able to create a market for themselves in the urban Indian cities, much of the nation was still underserved. There was an opportunity for someone to jump in, he said.

The startup began as an e-commerce platform on WhatsApp, where it offered hundreds of products to consumers. It didn’t take long before a major consumer spending pattern was visible, Rao said. People were only interested in buying items that were selling at discounted rates, said Rao.

Over time, that idea has become part of DealShare’s core offering. Today it incentivizes consumers — by offering them discounts and cashbacks — to share deals on products with their friends. The startup, which has since launched its own app and website, now operates in over two dozen cities in India.

Consumers wanted products that were relevant to them and they wanted to buy these items at a price that instilled the most value for their bucks, said Rao. “We focused on locally produced items instead of national brands. Even today, 80% to 90% of items we sell are locally produced,” he said.

How DealShare model works. (Image and data by Bain & Company)

Amazon and Flipkart have captured less than 3% of the retail market in India, leaving room for firms to explore other models. Social commerce is one of the bets we’re seeing being play out in India. The other bet gaining traction is digitizing neighborhood stores in the country — without so much of the social element — that dot tens of thousands of towns, cities and villages in India.

The investment comes as Tiger Global looks to close over two dozen deals in India this year, TechCrunch reported on Monday. Tiger Global, which recently closed a $6.7 billion fund, last week led , business messaging platform Gupshup, and investment app Groww, and participated in fintech app CRED’s round, helping all of these startups attain the much sought after unicorn status.

Meesho, the market leading social commerce in India, also turned a unicorn last week after SoftBank led a $300 million round in the Indian firm, valuing it at $2.1 billion.

DealShare counts WestBridge, Falcon Edge Capital’s Alpha Wave, Z3Partners, and Omidyar Network among its investors.

Tiger Global goes super aggressive in India

]]> Mon, 12 Apr 2021 16:22:58 +0000 BlogLikes - Find Most Popular Blogs Amazon Ecommerce Apps Asia India Softbank Funding Tech Walmart Tiger Global Flipkart Omidyar Network Rao Gupshup The New York Vineet Rao DealShare TechCrunch Tiger Global Bain Company Amazon WestBridge Falcon Edge Capital Infographic: Consumers Are Making More Purchases Through Social Media in the Pandemic http://feedproxy.google.com/~r/Adfreak/~3/aBCjYJP8T8A/ ]]> Sun, 11 Apr 2021 20:00:00 +0000 BlogLikes - Find Most Popular Blogs Ecommerce Advertising Social Media Magazine Platforms BazaarVoice Data Points China gets serious about antitrust, fines Alibaba $2.75B http://feedproxy.google.com/~r/Techcrunch/~3/dVJCqXETFZI/ Chinese regulators have hit Alibaba with a record fine of 18 billion yuan (about $2.75 billion) for violating anti-monopoly rules as the country seeks to rein in the power of its largest internet conglomerates.

In November, China proposed sweeping antitrust regulations targeting its tech industry. In late December, the State Administration for Market Regulation said it had launched an antitrust probe into Alibaba. SAMR, the country’s top market regulator, said on Saturday it had determined that Alibaba had been “abusing market dominance” since 2015 by forcing its merchants to sell on one of the two main e-commerce sites in China instead of letting them choose freely.

Since late 2020, a clutch of internet giants including Tencent and Alibaba have been hit with fines for violating anti-competition practices. The meager sums of these punishments were symbolic at best compared to the benefits the tech firms reap from their market concentration. No companies have been told to break up their empires and users still have to hop between different super-apps that block each other off.

In recent weeks, however, there are signs that the antitrust campaign is getting more serious. The latest fine on Alibaba is equivalent to 4% of the company’s revenue generated in the calendar year of 2019 in China.

“Today, we received the Administrative Penalty Decision issued by the State Administration for Market Regulation of the People’s Republic of China,” Alibaba said in a statement. “We accept the penalty with sincerity and will ensure our compliance with determination. To serve our responsibility to society, we will operate in accordance with the law with utmost diligence, continue to strengthen our compliance systems and build on growth through innovation.”

The thick walls that tech companies build against each other are starting to break down, too. Alibaba has submitted an application to have its shopping deals app run on WeChat’s mini program platform, Wang Hai, an Alibaba executive, recently confirmed.

For years, Alibaba services have been absent from Tencent’s sprawling lite app ecosystem, which now features millions of third-party services. Vice versa, WeChat is notably missing from Alibaba’s online marketplaces as a payment method. If passed, the WeChat-powered Alibaba mini app would break with precedent of the pair’s long stand-off.

This is a developing story.

China lays out ‘rectification’ plan for Jack Ma’s fintech empire Ant

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Fri, 09 Apr 2021 22:36:00 +0000 BlogLikes - Find Most Popular Blogs TC Ecommerce Asia China Tech Alibaba Tencent Jack Ma State Administration Wang Hai State Administration for Market Regulation People 's Republic of China Alibaba
Daily Crunch: Amazon beats back union push http://feedproxy.google.com/~r/Techcrunch/~3/Nth-k8qo8LM/ Efforts to unionize an Amazon warehouse in Alabama appear to have failed, Facebook takes down fake review groups and a monkey plays Pong with its brain. This is your Daily Crunch for April 9, 2021.

The big story: Amazon beats back union push

Union organizers lost a much-publicized election at Amazon’s Bessemer, Alabama warehouse, with more than half of the 3,215 ballots cast ultimately voting against joining the Retail, Wholesale and Department Store Union.

“It’s easy to predict the union will say that Amazon won this election because we intimidated employees, but that’s not true,” the company said in a blog post. “Our employees heard far more anti-Amazon messages from the union, policymakers, and media outlets than they heard from us. And Amazon didn’t win—our employees made the choice to vote against joining a union.”

However, RWDSU President Stuart Appelbaum suggested that there will “very likely” be a rerun election, and his organization is demanding “a comprehensive investigation over Amazon’s behavior in corrupting this election.”

The tech giants

Facebook takes down 16,000 groups trading fake reviews after another poke by UK’s CMA — The CMA has been leaning on tech giants to prevent their platforms from being used as marketplaces for selling fake reviews.

Startups, funding and venture capital

Watch a monkey equipped with Elon Musk’s Neuralink device play Pong with its brain — A macaque named Pager was eventually able to control the in-game action entirely with its mind via the Link hardware and embedded neural threads.

Mortgage is suddenly sexy as SoftBank pumps $500M in Better.com at a $6B valuation — The COVID-19 pandemic and historically low mortgage rates fueled an acceleration in online lending.

SnackMagic picks up $15M to expand from build-your-own snack boxes into a wider gifting marketplace — The company hit a $20 million revenue run rate in eight months and turned profitable in December.

Advice and analysis from Extra Crunch

So you want to raise a Series A — Kleiner Perkins’ Bucky Moore shares sector-agnostic advice.

How we dodged risks and raised millions for our open-source machine language startup — Jorge Torres and Adam Carrigan of MindDB tell their funding story.

Building the right team for a billion-dollar startup — From building out Facebook’s first office in Austin to putting together most of Quora’s team, Bain Capital Ventures managing director Sarah Smith has done a bit of everything when it comes to hiring.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

The 2022 Chevrolet Bolt EUV lowers the cost of entry for some of GM’s most advanced tech — The optional Super Cruise puts it on course to compete with the Tesla Model Y.

APKPure app contained malicious adware, say researchers — APKPure is a widely popular app for installing older or discontinued Android apps from outside of Google’s app store.

Last call for Detroit startups to apply for TechCrunch’s Detroit City Spotlight pitch-off — The deadline is today, April 9.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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Fri, 09 Apr 2021 18:15:43 +0000 BlogLikes - Find Most Popular Blogs Google Amazon Facebook Ecommerce Elon Musk UK Softbank Alabama Tech Policy Austin Gm Quora Union Detroit Cma Pong Kleiner Perkins Bain Capital Ventures Sarah Smith Stuart Appelbaum Bessemer Alabama Department Store Union Jorge Torres Daily Crunch Bucky Moore Adam Carrigan Detroit City Spotlight
A man in California was charged with identity theft and wire fraud for stealing Shopify data http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/fUxPZStSdSk/shopify-breach-california-man-indicted-stealing-customer-merchant-data-2021-4 The logo of Shopify is seen outside its headquarters in Ottawa

Thomson Reuters

  • A man in California was indicted for stealing customer and merchant data from Shopify, TechCrunch said.
  • The man is facing charges of aggravated identity theft and conspiracy to commit wire fraud.
  • Last year, Shopify fired two "rogue" workers for stealing customer and merchant data.
  • See more stories on Insider's business page.

A California man has been charged with aggravated identity theft and conspiracy to commit wire fraud for stealing Shopify customer and merchant data.

A grand jury indicted the man, Tassilo Heinrich, who was about 18 during the alleged scheme, according to TechCrunch, which first reported the matter. TechCrunch confirmed the "victim company" listed in the indictment was Shopify with a person familiar.

Heinrich used stolen data, such as names, email and billing addresses, and payment methods, to set up fake merchant pages to take business from sellers, or he would sell the data to co-conspirators, who would use it to commit fraud against the merchants and their customers, according to the indictment.

During the scheme, which lasted at least a year, Heinrich worked with an accomplice, who was a customer support agent authorized to use Shopify's internal network, the indictment said.

Heinrich paid the agent in thousands of dollars of cryptocurrency, according to the indictment, which documented the payments.

Heinrich has pleaded not guilty, TechCrunch reported.

Read more:

Shopify did not directly confirm to Insider it is the company involved in the Heinrich case, but said in a statement: "Shopify has cooperated with the FBI to investigate an incident involving the data of a small number of our merchants in September 2020. As previously stated, the perpetrators involved no longer work with Shopify. Because there is an active criminal investigation, we are unable to provide further comment at this time."

Last fall, two "rogue" workers from Shopify's third-party customer support team "were engaged in a scheme to obtain customer transactional records" of about 200 merchants, the company said. Shopify said the data included emails, names, addresses, and order details, but not "sensitive personal or financial information."

The company said it fired the employees and referred the incident to law enforcement.

Shopify, based in Ottawa, Canada, is a platform that allows business owners to set up online stores and sell their products to consumers. It now has more than a million merchants, according to the website.

About a fifth of Shopify sellers deserve a "caution" or "warning" sign for selling fraudulent items or not delivering orders, according to a January report from FakeSpot. Scammers can easily set up merchant accounts on Shopify that knock off the original sellers, too, the report noted.

In March, Insider reported that one Shopify merchant lost $55,000 in sales when her bank account information was unknowingly changed. The hacker received her sales for about a month until she and Shopify noticed the problem.

If you're a seller and believe you have lost money on Shopify because of a stolen or hacked account, reach out to the reporter of this article, Natasha Dailey at ndailey@businessinsider.com.

Read the original article on Business Insider

[Author: ndailey@businessinsider.com (Natasha Dailey)]

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Thu, 08 Apr 2021 11:32:02 +0000 BlogLikes - Find Most Popular Blogs Ecommerce News California Trends Fraud Fbi Retail Indictment Shopify Identity Theft Ottawa Canada Heinrich Natasha Dailey Tassilo Heinrich Ottawa Thomson Reuters Shopify TechCrunch FakeSpot Scammers
Mercato raises $26M Series A to help smaller grocers compete online http://feedproxy.google.com/~r/Techcrunch/~3/KqJs_5Izs3E/ The pandemic upended the way people shop for their everyday needs, including groceries. Online grocery sales in the U.S. are expected to reach 21.5% of the total grocery sales by 2025, after leaping from 3.4% pre-pandemic to 10.2% as of 2020. One business riding this wave is Mercato, an online grocery platform that helps smaller grocers and specialty food stores get online quickly. After helping grow its merchant sales by 1,300% in 2020, Mercato has now closed on $26 million in Series A funding, the company tells TechCrunch.

The round was led by Velvet Sea Ventures with participation from Team Europe, the investing arm of Lukasz Gadowski, co-founder of Delivery Hero. Seed investors Greycroft and Loeb.nyc also returned for the new round; Gadowski and Mike Lazerow of Velvet Sea Ventures have also now joined Mercato’s board.

Mercato itself was founded in 2015 by Bobby Brannigan, who had grown up helping at his family’s grocery store in Brooklyn. But instead of taking over the business, as his Dad had hoped, Brannigan left for college and eventually went on to bootstrap a college textbook marketplace, Valore Books, to $100 million in sales. After selling the business, he returned his focus to the family’s store and found that everything was still operating the way it had been decades ago.

Image Credits: Bobby Brannigan of Mercato

“He had a very basic website, no e-commerce, no social media and no point-of-sale system,” explains Brannigan. “I said, ‘I’m going to build what you need.’ This was my opportunity to help my dad in an area that I knew about,” he adds.

Brannigan recruited some engineers from his last company to help him build the software systems to modernize his dad’s store, including Mercato’s co-founders Dave Bateman, Michael Mason and Matthew Alarie. But the team soon realized it could do more than help just Brannigan’s dad — they could also help the 40,000 independent grocery stores just like him better compete with the Amazon’s of the world.

The result was Mercato, a platform-as-a-service that makes it easier for smaller grocers and specialty food shops to go online to offer their inventory for pickup or delivery, without having to partner with a grocery delivery service like Instacart, Amazon Fresh or Shipt.

The solution today includes an e-commerce website and data analytics platform that helps stores understand what their customers are looking for, where customers are located, how to price their products and other insights that help them to better run their store. And Mercato is now working on adding a supply platform to help the stores buy inventory through their system, Brannigan notes.

“Basically, the vision of it is to give them the tech, the systems and the platform they need to be successful in this day and age,” notes Brannigan.

He likens Mercato as a sort of “Shopify for groceries,” as it gives stores their own page on Mercato where they can reach customers. When the customer visits Mercato on the web or via its app, they can enter their ZIP code to see which local stores offer online shopping. Some stores simply redirect their existing websites to their Mercato page, as they can continue to offer other basic information, like address, hours and other details about their stores on the Mercato-provided site, while gaining access to Mercato’s more than 1 million customers.

Who’s building the grocery store of the future?

However, merchants also can opt for a white-label solution that they can plug into their own website, which uses their own branding.

The stores can further customize the experience they want to offer customers, in terms of pickup and delivery, and the time frames for both that they want to commit to. If they want to ease into online grocery, for example, they can start with next-day delivery services, then speed thing up to same-day when they’re ready. They also can set limits on how many time slots they offer per hour, based on staffing levels.

Image Credits: Mercato

Unlike Instacart and others which send shoppers to stores to fill the orders, Mercato allows the merchants themselves to maintain the customer relationship by handling the orders themselves, which they can receive via email, text or even robo-phone calls.

“They’re maintaining that relationship,” says Brannigan. “Usually, it’s a lot better if it’s somebody from the store [doing the shopping] because they might know the customer; they know the kind of product they’re looking for. And if they don’t have it, they know something else they can recommend — so they’re like a really efficient recommendation engine.”

“The big difference between an Instacart shopper and the worker in the store is that the worker in the store understands that somebody is trying to put a meal on the table, and certain items could be an important ingredient,” he notes. “For the shoppers at Instacart, it’s about a time clock: how quickly can they pick an order to make the most money.”

The company contracts with both national and regional couriers to handle the delivery portion, once orders are ready.

Mercato’s system was put to the test during the pandemic, when demand for online grocery skyrocketed.

This is where Mercato’s ability to rapidly onboard merchants came in handy. The company says it can take stores online in just 24 hours, as it has built out a centralized product catalog of over a million items. It then connects with the store’s point-of-sale system, and uploads and matches the store’s products to their own database. This allows Mercato to map around 95% of the store’s products in a matter of minutes, with the last bit being added manually — which helps to build out Mercato’s catalog even further. Today, Mercato can integrate with virtually all point-of-sale (POS) solutions in the grocery market, which is more than 30 different systems.

As customers shop, Mercato’s system uses machine learning to help determine if a product is likely in stock by examining movement data.

“One of the challenges in grocery is that most stores actually don’t know how many quantities they have in stock of a product,” explains Brannigan. “So we launch a store, we integrate with the POS. And with the POS we can see how quickly a product is moving in-store and online. Based on movement, we can calculate what is in stock.”

This system, he says, continues to get smarter over time, too.

“We’re certainly three to five years ahead, and we’re not going back,” says Brannigan of the COVID impacts to the online grocery business. “It’s very plentiful now in many places, in terms of e-commerce offerings. And the nature of retail businesses is competitive. So if 1% of people are online, it might not drive other people. But if you have 15% of stores online, then other stores have to get online or they won’t be able to compete,” he notes.

Mercato generates revenue both from its consumer-facing membership program, with plans that range from $96/year – $228/year, depending on distance, and from the merchants themselves, who pay a single-digit percentage transaction fee on orders — a lower percentage than what restaurant delivery companies charge.

The company has now scaled its service to more than 1,000 merchants across 45 U.S. states, including big cities like New York, Chicago, LA, DC, Boston, Philadelphia and others.

With the additional funding, Mercato aims to expand its remotely distributed team of now 80 employees, as well as its data analytics platform, which will help merchants make better decisions that impact their business. It also plans to refresh the consumer subscription to add more benefits and perks that make it more compelling.

Mercato declined to share its valuation or revenue, but as of the start of the pandemic last year, the company had said it was reaching a billion in sales and a $700 million run rate.

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Thu, 08 Apr 2021 11:10:27 +0000 BlogLikes - Find Most Popular Blogs Amazon Startups Ecommerce Shopping Funding Tech Supermarkets E-commerce Online Shopping Brooklyn Machine Learning Retailers Instacart Dad Greycroft Grocery Store Loeb Brannigan Team Europe Online Grocery Mercato Lukasz Gadowski Recent Funding Gadowski Velvet Sea Ventures Mike Lazerow Instacart Amazon Fresh Bobby Brannigan Dave Bateman Michael Mason Matthew Alarie Brannigan He likens Mercato Mercato Unlike Instacart New York Chicago LA DC Boston Philadelphia
Alyce, an AI-based personalised corporate gifting startup, raises $30M http://feedproxy.google.com/~r/Techcrunch/~3/zGzA5GTsXZQ/ Swag has a long and patchy history in the world of business. For every hip pair of plaid socks, there are five t-shirts you may never wear, an itchy scarf, a notepad your kids might use, and an ugly mug; and most of all, likely thousands of dollars and lots of time invested to make those presents a reality. Now, a startup that has built a service to rethink the concept behind corporate gifts and make them more effective is today announcing a round of funding to continue expanding its business — and one sign that it may be on to something is its progress so far.

Alyce, a Boston startup that has built an AI platform that plugs into various other apps that you might use to interact and track your relationships with others in your working life — sales prospects, business partners, colleagues — and then uses the information to personalise gift recommendations for those people, has raised $30 million, a Series B that it will be using to continue building out its platform, signing up more users, and hiring more people for its team.

This round is being led by General Catalyst, with Boston Seed Capital, Golden Ventures, Manifest, Morningside and Victress Captial — all previous backers — also participating.

Alyce says that it has grown 300% year-over-year between 2019 and 2020, tackling a corporate gifting and promotional items industry that ASI Market Research estimates is worth around $24.7 billion annually. Its customers today include Adobe’s Marketo, G2, Lenovo, Wex, Invision, DialPad, GrubHub, and 6Sense.

As with so many other apps and services that aim at productivity and people management, Alyce notes that this year of working remotely — which has tested many a relationship and job function, led to massive inbound and outbound digital activity (the screen is where everything gets played out now), and frankly burned a lot of us out — has given it also a new kind of relevance.

“As everyone was flooded with spam last year unsubscribing soared,” Greg Segall, founder and CEO of Alyce, said in a statement. “When a prospect opts out, that’s forever. It’s clear that both brands and customers crave the same thing – a much more purposeful and relatable way to engage.”

Alyce’s contribution to more quality engagement comes in the form of AI-fueled personalization.

Linking up with the other tools people typically use to track their communications with people — they include Marketo, Salesforce, Vidyard and Google’s email and calendar apps — the system has been built with algorithms that read details from those apps to construct some details about the preferences and tastes of the intended gift recipient. It then uses that to come up with a list of items that might appeal to that person from a wider list that it has compiled, with some 10,000 items in all. (And yes, these can also include more traditional corporate swag items like those socks or mugs.) Then, instead of sending an actual gift, “Swag Select”, as Alyce’s service is called, sends a gift code that lets the person redeem with his or her own choice from a personalised, more narrowed-down list of items.

Alyce itself doesn’t actually hold or distribute the presents: it connects up with third parties that send these out. (It prices its service based on how much it is used, and how many more tools a user might want to have to personalise and send out gifts.)

Yes, you might argue that a lot of this sounds actually very impersonal — the gift giver is not directly involved in the selection or sending of a present at all, which instead is “selected” by way of AI. Essentially, this is a variation of the personalization and recommendation technology that has been built to serve ads, suggest products to you on e-commerce sites, and more.

But on the other hand, it’s an interesting solution to the problem of trying to figure out what to get someone, which can be a challenge when you really know a person, and even harder when you don’t, while at the same time helping to create and fulfill a gesture that, at the end of the day, is about being thoughtful of them, not really the gift itself.

(You could also argue, I think, that since the gift lists are based on a person’s observations about the recipient, there is in fact some personal touches here, even if they have been run through an algorithmic mill before getting to you.)

And ultimately, the aim of these gifts is to say “thank you for this work relationship, which I appreciate”, or “please buy more printer paper from me” — not “I’m sorry for being rude to you at dinner last night.” Although… if this works as it should, maybe there might well be an opportunity to extending the model to more use cases, for example brands looking for ways to change up their direct mail marketing campaigns, or yes, people who want to patch things up after a spat the night before.

Notably, for General Catalyst, it’s interested indeed in the bigger gifting category, pointing to the potential of how this service could be scaled in the future.

“At General Catalyst, we are proud to lead the latest round of funding for Alyce as the company has reimagined the gifting category with technology and impact. The ability to deliver products and experiences that both the giver and recipient feel good about is incredibly powerful,” said Larry Bohn, Managing Director at General Catalyst, in a statement.

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Thu, 08 Apr 2021 08:03:14 +0000 BlogLikes - Find Most Popular Blogs Google TC Ecommerce Enterprise Adobe Boston Marketing Tech Artificial Intelligence Sales And Marketing Gifting General Catalyst Corporate Gifts Swag Larry Bohn Alyce Greg Segall ASI Market Research Lenovo Wex Invision DialPad GrubHub Marketo Salesforce Vidyard
The Top 4 Things to Know Before You Start an E-Commerce Site http://feedproxy.google.com/~r/noobpreneur/~3/AEWLhb-veXU/ If you’ve decided to enter the world of e-commerce, you couldn’t have picked a better time. The last year has changed everything about the way people spend their money, and… Read more »

The post The Top 4 Things to Know Before You Start an E-Commerce Site appeared first on Noobpreneur.com.

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Thu, 08 Apr 2021 05:40:06 +0000 BlogLikes - Find Most Popular Blogs Ecommerce Business Management Tips Info Tech Starting A Business
Norway’s Kolonial rebrands as Oda, bags $265M on a $900M valuation to grow its online grocery delivery business in Europe http://feedproxy.google.com/~r/Techcrunch/~3/-dO3EcXQ2l8/ Food delivery startups, and specifically those focused on grocery delivery, continue to reap super-sized rounds of funding in Europe, buoyed by a year of pandemic living that has led many consumers to shift to shopping online. Today, the latest of these is coming out of Norway.

Kolonial, a startup based out of Oslo that offers same-day or next-day delivery of food, meal kits and home essentials — its aim is to provide “a weekly shop” for prices that compete against those of traditional supermarkets — has raised €223 million ($265 million) in an equity round of funding. Along with that, the company — profitable as of last year — is rebranding to Oda and plans to use the money (and new name) to expand to more markets, starting first with Finland and then Germany in 2022.

The market for online grocery ordering and delivery is gearing up to be a very crowded one, with hundreds of millions of dollars being poured by investors into the fuel tanks of a range of startups — each originating out of different geographies, each with a slightly different approach. Oda believes it has the right mix to end up at the front of the pack.

“We have found ourselves in a unique position,” CEO and co-founder Karl Munthe-Kaas said in an interview with TechCrunch. “We have built a service targeting the mass market with instant deliveries and low prices, because if you want to capture the full basket for the family, you can’t be a premium service. We’ve done that, and we’re profitable.”

And now, it will have the backing of two e-commerce heavyweights for its next steps. SoftBank’s Vision Fund 2 and Prosus (the tech holdings of South Africa’s Naspers), are co-leading the round, with past backers Kinnevik and a strategic investor, Norwegian “soft discount” chain REMA, also participating.

Munthe-Kaas confirmed to TechCrunch in an interview that Oda is valued at €750 million ($900 million) post-money.

The funding is a big leap for Oda (the name is not officially going to come into effect until the end of this month, although the company is already describing itself with the new brand, so we’ll follow that lead). PitchBook data notes that before this round, Oda had only raised about $96 million, and its last valuation was estimated to be just $178 million in 2017.

The company has certainly come a long way. Founded in 2013 by ten friends, Kolonial originally seemed to have a more modest vision when it first started out: Kolonial in Norwegian doesn’t mean “colonial” (a connotation Munthe-Kaas nevertheless said the startup wanted to avoid, one big reason for the change), but “cornershop.” These days, Oda is focused more on competing against large supermarkets — its average order size is $120 — yet with a significantly more efficient cost base behind the scenes.

It’s also been helped by the current climate. Online grocery shopping has been growing and maturing for a while now, but the last year been a veritable hothouse in that process: Covid-19, shelter in place orders and a general desire for people to keep their distance all compelled many more consumers to try out online grocery shopping for the first time, and many have stuck with it.

“We have seen a significant inflection point with grocery over the last year with the market transitioning online, accelerated by Covid,” said Larry Illg, CEO of Prosus Food, in a statement. “Oda’s leadership and impressive growth in Norway paired with its ground-breaking technology and ambition to scale across Europe and beyond makes them an ideal partner to tackle the grocery opportunity over the coming years.”

Oda has over the years grown to become the sector leader in a category it arguably helped define in its home country. It was profitable last year on revenues of €200 million, and it currently controls some 70% of Norway’s online grocery ordering and delivery market based on its own particular approach to the model.

That model involves Oda building and controlling its own supply chains from producers to consumers (no partnerships with third y partphysical retailers), producing several of the products itself (such as baked goods) to order, and using centralized fulfillment centers to manage orders for large geographies.

“Centralized warehouses means 50 supermarkets in one location,” Munthe-Kaas said, adding that this also makes the business significantly greener, too.

Those fulfillment centers, meanwhile, are operated at “extreme efficiency”, in his words. Oda’s grocery item picking averages out at 212 units per hour — that is, the amount of items “picked” for orders in a week divided by the number of hours in a week. The next closest UPH number in the industry, Munthe-Kaas said, was Ocado in the UK at 170 UPH, and the norm, he added, was more like 100 UPH, with physical store picking (where customers select items from shelves themselves) averaging out at 70 UPH.

All of this translates to much more cost-effective operations, including more efficient ordering and stock rotation, which helps Oda make better margins on its sales overall. Munthe-Kaas declined to go into the details of how Oda manages to get such high UPH numbers — that’s competitive knowledge, he said — noting only that a lot of automation and data analytics goes into the process.

That will be music to the ears of SoftBank, which has had a complicated run in e-commerce in the last several years, backing a number of interesting juggernauts that have nonetheless found themselves unable to improve on challenging unit economics.

“Oda’s leading position in Norway is testament to the merits of its bespoke and data-driven approach in offering a personalised, holistic and reliable online grocery experience,” said Munish Varma, managing partner for SoftBank Investment Advisers, in a statement. “We believe that Oda’s customer-centric focus, market-leading automation technology and fulfillment efficiency are a winning combination, and position Oda for success in scaling internationally for the benefit of customers and suppliers alike.”    

The big challenge for Oda going forward will be whether it can transplant its business model as it has been developed for Norway into further markets.

Oda will not only be looking for customer traction for its own business, but it will be doing so potentially against heavy competition from others also looking to expand outside their borders.

There are other online supermarket plays like Rohlik out of the Czech Republic (which in March bagged $230 million in funding); Everli out of Italy (formerly called Supermercato24, it also raised $100 million); Picnic out of the Netherlands (which has yet to announce any recent funding but it feels like it’s only a matter of time given it too has publicly laid out international ambitions); and Ocado in the UK (which also has raised huge amounts of money to pursue its own international ambitions).

And there is also the wave of companies that are building more fleet-of-foot approaches around smaller inventories and much faster turnaround times, the idea being that this can cater both to individuals and a different way of shopping — smaller and more often — even if you are a family.

Among these so-called “q-commerce” (quick commerce) players, covering just some of the most recent funding rounds, Glovo just last week raised $528 million; Gorillas in Berlin raised $290 million; Turkey’s Getir — also rapidly expanding across Europe — picked up $300 million on a $2.6 billion valuation as Sequoia took its first bite into the European food market; and reportedly Zapp in London has also closed $100 million in funding.

Deliveroo, which went public last week, is also now delivering groceries (in partnership with Sainsbury’s) alongside its restaurant delivery service.

These, ironically, are more cornershop replacements than Oda itself (formerly called Kolonia, or “cornershop” in Norwegian), and Munthe-Kaas said he sees them as “complementary” to what Oda does.

Indeed, Munthe-Kaas remains very committed to the basic rulebook that Oda has lived by for years.

“You need to beat the physical stores on quality, selection and price and get it home delivered,” he said. “This is a margin business and the only way to optimize is to be completely relentless.”

But he also understands that this might ultimately need to be modified depending on the market. For example, while the company has not worked with other retailers in Norway — even the investment by REMA is not for distribution but for better economies of scale in procuring products that REMA and Oda will sell independently from each other — this might be a route that Oda chooses to take in other markets.

“We’re in discussions with several other retailers, wholesalers and producers,” he said. “It’s important to get sourcing terms and have upstream logistics, but there are many ways of achieving that. We are super open to making partnerships on that front, but we still think the way to win is to run the value chain.”

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Thu, 08 Apr 2021 01:30:57 +0000 BlogLikes - Find Most Popular Blogs Food Ecommerce Europe UK London Germany Berlin Softbank Funding Tech Turkey Czech Republic South Africa Italy Netherlands Sainsbury Finland Norway Grocery Ocado Grocery Delivery Naspers Sequoia Oslo ODA Zapp Kinnevik Rema Online Grocery Rohlik Glovo Larry Illg SoftBank Investment Advisers Kolonia Prosus COVID Everli Munish Varma Norway Kolonial Karl Munthe Kaas Munthe Kaas Kolonial Prosus Food
Mexican unicorn Kavak raises a $485M Series D at a $4B valuation. http://feedproxy.google.com/~r/Techcrunch/~3/FaD36x9ssko/ Kavak, the Mexican startup that’s disrupted the used car market in Mexico and Argentina, today announced its Series D of $485 million, which now values the company at $4 billion. This round more than triples their previous valuation of $1.15 billion, which established them as a unicorn just a couple of months ago in October of 2020. Kavak is now one of the top five highest-valued startups in Latin America.

The round was led by D1 Capital Partners, Founders Fund, Ribbit, and BOND, and brings Kavak’s total capital raised to date to more than $900 million. Kavak recently soft-launched in Brazil, and this new round of funding will be used to build out the Brazilian market and beyond, said Carlos García Ottati, Kavak’s CEO and Co-Founder. The company plans to do a full launch in Brazil in the next 60 days, García said, and we can expect to see Kavak in markets outside Latin America in the next 24 months, he added.

“We were built to solve emerging market problems,” García said.

Kavak, which was founded in 2016, is an online marketplace that aims to bring transparency, security, and access to financing to the used car market. The company also offers its own financing through its fintech arm, Kavak Capital, and counts more than 2,500 employees and 20 logistics and reconditioning hubs in Mexico and Argentina.

“In Latin America, 90% of the [used car] transactions are informal, which leads to a 40% fraud rate,” said García, who experienced these challenges first-hand when he moved to Mexico from Colombia a couple of years ago and bought a used car. 

“My budget allowed me to buy a used car, but there was no infrastructure around it. It took me 6 months to buy the car, and then the car had legal and mechanical issues and I lost most of my money,” he said.  Kavak buys cars from individuals, refurbishes them, and offers warranties to buyers.

“Instead of buying a new car, they can buy a better car that still has all the warranties. It’s a really aspirational process,” said García. The company, which really amounts to four companies in one given its areas of focus, was built to be comprehensive by design in order to meet the various gaps in the market, García said.

“When you’re building a business here [Latin America], you need to build several businesses because so many things are broken,” he said. That’s why the financing option, for example, has been a key to their success, according to García.

Financing has traditionally been hard to come by in Brazil, and as García said, the used car market lacks infrastructure there, too. That being said, Brazil is Latin America’s fintech hub, and the space has made leaps and bounds over the last 7-10 years with companies such as Nubank, PagSeguro, Creditas, PicPay, and others leading the way. As a result, credit cards and loans are more widely available today in the region, offering competition for Kavak Capital. While Kavak has localized some of its product for the Brazilian market — namely building out a Portuguese language version of the app and website — García said the markets are very similar.

“In Brazil, you still have the same problems that you have in Mexico, but Brazil is a little more developed, especially in fintech, which is light years ahead of Mexico,” he said.

With the Brazilian product heading to the races, García said they already have plans for other regions, though he declined to name them.

“80% of people in emerging markets don’t have access to a car,” García said of the global market size. “We want to go into big markets where customers are facing similar problems and where Kavak can really change their lives,” he added.

]]>
Wed, 07 Apr 2021 13:01:14 +0000 BlogLikes - Find Most Popular Blogs Startups Transportation Ecommerce Apps Mexico Finance Funding Articles Tech Colombia Automotive Used Cars Brazil Argentina Online Marketplace Logistics Financing Latin America Nubank Unicorn Founders Fund Financial Technology Garcia Online Lending Creditas series D Recent Funding D1 Capital Partners KAVAK PagSeguro Carlos García Ottati Kavak Kavak Capital Nubank PagSeguro Creditas PicPay Kavak Capital While Kavak
The Bouqs Captures the Fake-Like Look Moms Give to Unwanted Mother’s Day Gifts http://feedproxy.google.com/~r/Adfreak/~3/7FP4tgTtk8o/ ]]> Tue, 06 Apr 2021 18:21:20 +0000 BlogLikes - Find Most Popular Blogs Ecommerce Advertising AdFreak Brighton-based MPB snaps up $69M to build out its used camera equipment marketplace http://feedproxy.google.com/~r/Techcrunch/~3/FWXXq6grv6A/ Used-goods marketplaces, an online staple since the beginning of the internet as we know it, have really come into their own during the Covid-19 pandemic: they’ve been a place for people clearing out their domestic spaces to list items that they have that are still in good shape, making some money in the process; and for buyers, they are a resource for finding items at a time when shopping in person and spending money in uncertain economic times have both fallen out of favor. Today, MPB — a popular marketplace that specializes in used cameras and photographic equipment — is announcing significant funding to double down on the opportunity after seeing its platform “recirculate” some 300,000 items of kit globally each year and pass £100 million ($139 million) in revenues this year.

The Brighton, England-based startup has snapped up £49.8 million (about $69 million at current exchange rates). It plans to use the money both to expand into more markets — it currently has offices in Brooklyn and Berlin — and into more product areas, specifically, extending the marketplace concept to serve content creators.

The Series D is being led by Vitruvian Partners, with significant participation from Acton Capital, and Mobeus Equity Partners, Beringea and FJ Labs also participating. Vitruvian is a new backer for MPB; the rest were already invested in the startup, which has raised around $91 million since 2011.

MPB did not disclose its valuation in a statement on the fundraise; we have contacted the company to ask and will update if / when we learn more.

For some context, this is the biggest-ever round raised by a startup out of Brighton. Home to one university and right next to another, Brighton has had some tech world focus — Brandwatch made a splash in February when it was acquired by Cision for $450 million; and it is well known for gaming companies and talent — but has largely been off the fundraising radar, perhaps in part because it is so close to London and its own gravitational pull for entrepreneurs and VCs. PitchBook put MPB’s valuation at $50.86 million in 2019; it’s likely to be significantly higher than this now.

“This funding round is a major milestone for MPB, culminating a decade of strong performance and a vision to make great kit accessible and affordable,” said Matt Barker, MPB’s founder and CEO, in a statement. “With the backing of Vitruvian Partners and those reinvesting in our business, we can accelerate our US and European growth strategy at scale, profitably. Photography and videography are intrinsic to societies and cultures all over the world, and at MPB we have created a circular model that offers everyone the chance to be visual storytellers and content creators in a way that’s good for the planet.”

Indeed, what’s interesting about MPB is how it touches on and addresses a number of themes that have been playing out across the world of e-commerce and wider digital society, and what’s probably made it successful has been its appeal to people on one or more of those fronts at the same time.

First, there is the platform it gives to people to sell and buy used camera equipment. The sale of used items gives owners an opportunity to make money off items they no longer need, and buyers a way to procure items at lower costs. And it has an obvious environmental angle to it, since circular economy operators encourage people to get more life out of electronics that might otherwise simply become part of landfill (or encourage more manufacturing of new goods in their place).

But on a more practical level, used-good sales also have often put people off in part because they are deprived of some of the guarantees that you would normally get on goods when buying from more established retailers.

MPB provides buying and seller security in its own way: by employing a team of people to vet and prepare items for sale, and providing a six-month guarantee on items sold over its platform. That has paid off for it even pre-pandemic: the company said that its compound growth rate over the last five years has been 53%.

(And more generally, used goods marketplaces are seeing some big attention from VCs at the moment in Europe: in February, Wallapop in Spain raised $191 million for its more generalised used-goods marketplace, and in March Vestaire Collective raised $216 million.)

Second, it touches on the bigger trend we’ve seen around the growth of communities focused on specific rather than general interests. It’s a clear way of conferring more authenticity, focus and signal in an otherwise very noisy world online, and in a specialized area like the sale of photography equipment, this can be especially critical and a unique selling point over more generic sales platforms like eBay: it means more attention paid by the platform to stock, as well as a more focused community of buyers and sellers.

Third, there is the focus of MPB in particular. We have most definitely seen the birth of a “creator economy” online, where people are making livings out of their own brands (ugh), or from their specific creative output, bypassing some of the more traditional middle-men in favor of newer ones (eg, network broadcasters no longer the sole gatekeepers for serialized video content and all of the work that goes into making it; YouTube conversely now makes a killing off it, and if Substack, Patreon and others like it play their cards right, they will soon, in their own areas of interest, too.)

What this might mean for companies like MPB is a surge of interest and attention on equipment for capturing those images, although it will be interesting to see how and if that can be leveraged on a wider scale, given how so much of that creation today is happening on smartphones, which themselves continue to get more sophisticated and eat into not just casual photographers’ buying patterns, but more serious ones, too.

In the question of scaling, MPB will have an interesting partner in the form of Vitruvian Partners, which backs second-hand clothes marketplace Vestiaire Collective — which raised $216 million last month, another sign of the times and how they have boosted the opportunities for used-good sales — alongside other marketplaces like Carwow, Just Eat, Farfetch, Skyscanner and Trustpilot.

“MPB has developed a unique tech-enabled platform to meet a market need, transforming access to photography kit to become a global leader in its field, whilst building a product that genuinely has a positive impact on the world,” said Tom Studd, partner at Vitruvian Partners, said in a statement. “Matt and the team have achieved strong and profitable growth through recent launches in the US and Germany, and we’re delighted to partner with them for the next step of the journey. Vitruvian looks to back exceptional teams with unique products in large markets, and we believe Matt and the team fit those criteria perfectly.”

Sebastian Wossagk, managing partner at Acton Capital, added: “It’s always a privilege to watch companies like MPB grow and excel in their field. Matt and his team have already taken the first steps into internationalisation by opening locations in Brooklyn and Berlin, and we’re excited to support them as they pursue further expansion in both the US and Europe.”

Something notable about MPB is that Barker once said that he founded it in part because he didn’t feel that the requirements of people in the photography community were being addressed well enough by more general sites like eBay or Gumtree. That may still be the case for those two sites (and countless other generic sales platforms), but it doesn’t mean that there are not a number of other players addressing the used-photography equipment market. They include the likes of Worldwide Camera Exchange, Park Cameras, Camera World, and many others with equally SEO-friendly names. That represents opportunities for consolidation, competitive threat, and hopefully innovation for better services, but also a sign that there is more to this market than might meet the eye.

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Tue, 06 Apr 2021 05:16:29 +0000 BlogLikes - Find Most Popular Blogs Ecommerce Europe Photography London Youtube Ebay Germany Berlin Funding US Tech Spain Cameras Brooklyn Brighton Circular Economy Marketplaces Mpb Matt Barker Brighton England Brandwatch Trustpilot Wallapop Vitruvian Partners Acton Capital Matt Barker Brighton Home Substack Patreon Used Goods Mobeus Equity Partners Beringea Tom Studd Sebastian Wossagk
US indicts California man accused of stealing Shopify customer data http://feedproxy.google.com/~r/Techcrunch/~3/won8hJNv1AU/ A grand jury has indicted a California resident accused of stealing Shopify customer data on over a hundred merchants, TechCrunch has learned.

The indictment charges Tassilo Heinrich with aggravated identity theft and conspiracy to commit wire fraud by allegedly working with two Shopify customer support agents to steal merchant and customer data from Shopify customers to gain a competitive edge and “take business away from those merchants,” the indictment reads. The indictment also accuses Heinrich, believed to be around 18 years old at the time of the alleged scheme, of selling the data to other co-conspirators to commit fraud.

A person with direct knowledge of the security breach confirmed Shopify was the unnamed victim company referenced in the indictment.

Last September, Shopify, an online e-commerce platform for small businesses, revealed a data breach in which two “rogue members” of its third-party customer support team of “less than 200 merchants.” Shopify said it fired the two contractors for engaging “in a scheme to obtain customer transactional records of certain merchants.”

Shopify said the contractors stole customer data, including names, postal addresses and order details, like which products and services were purchased. One merchant who received the data breach notice from Shopify said the last four digits of affected customers’ payment cards were also taken, which the indictment confirms.

Another one of the victims was Kylie Jenner’s cosmetics and make-up company, Kylie Cosmetics, the BBC reported.

The indictment accuses Heinrich of paying an employee of a third-party customer support company in the Philippines to access parts of Shopify’s internal network by either taking screenshots or uploading the data to Google Drive in exchange for kickbacks. Heinrich paid the employee in thousands of dollars worth of cryptocurrency, and also fake positive reviews claiming to be from merchants to whom the employee had provided customer service but had not left feedback. The indictment alleges that Heinrich received a year’s worth of some merchants’ data.

Heinrich allegedly spent at least a year siphoning off incrementing amounts of data from Shopify’s internal network, at one point asking if he could “remotely access” the customer support employee’s computer while they were asleep.

Heinrich was arrested by the FBI at Los Angeles International Airport in February and is currently detained in federal custody pending trial, set to begin on September 7. Heinrich has pleaded not guilty.

A Shopify spokesperson did not respond to a request for comment.

Shopify says two support staff stole customer data from sellers

]]> Mon, 05 Apr 2021 15:17:53 +0000 BlogLikes - Find Most Popular Blogs Google Security Ecommerce Publishing California US Tech Spokesperson Companies Data Breach Fbi Philippines Kylie Jenner Shopify Federal Bureau of Investigation Los Angeles International Airport Heinrich Tassilo Heinrich Kylie Cosmetics the BBC The StockX EC-1 http://feedproxy.google.com/~r/Techcrunch/~3/svdCc-picaE/ Societies are defined by their markets. What people value, what they actually buy, how they transact and who they purchase from determine not just the goods in their possession, but the very society and culture they construct. It might seem that after thousands of years of evolution and refinement, concepts like quality, authenticity, value and price would be static. Nothing could be further from the truth.

StockX is a unique company at the nexus of two radical transitions that isn’t just redefining markets, but our culture as well. E-commerce upended markets, diminishing the physical experience by intermediating and aggregating buyers and sellers through digital platforms. At the same time, the internet created rapid new communication channels, allowing euphoria and desire to ricochet across society in a matter of seconds. In a world of plenty, some things are rare, and the hype around that rarity has never been greater. Together, these two trends demanded a stock market of hype, an opportunity that StockX has aggressively pursued.

It’s a foundational new category of market — and a lucrative one. Now valued at $2.8 billion, StockX has facilitated over 10 million transactions. Its online-only marketplace is used for buying and selling sneakers, streetwear, electronics, collectibles, handbags and watches that are primarily sneaker and streetwear culture-adjacent, are in high demand and only available in low quantities. Sellers post their asking price and buyers share the price they want to pay anonymously. The platform makes all transactional data completely available to anyone that visits the site, and it authenticates every product by hand, acting as a safeguarded, price-regulating middleman.

It’s Amazon, but not exactly. It’s an auction, but not really. It conveys values like a stock market, but unlike the New York Stock Exchange, the company is defined less by financial instruments than its method of connecting buyers and sellers. It’s a local store with vetted products, but online and global. In short, it’s a unique marketplace that requires careful analysis of not just the cultural context it operates in, but the economics and incentives of the players on both sides.

TechCrunch’s writer and analyst for this EC-1 is Rae Witte. She has written extensively on technology, business and culture for publications like TechCrunch as well as the Wall Street Journal, Vogue Business and our corporate sister publication Engadget. She’s followed the rise of StockX since nearly its founding, and is in a lead position to tell this nuanced story. The lead editor for this package was Danny Crichton, the assistant editor was William E. Ketchum III, the copy editor was Richard Dal Porto and illustrations were created by Nigel Sussman.

StockX had no say in the content of this analysis and did not get advance access to it. Witte has no financial ties to StockX or other conflicts of interest to disclose.

The StockX EC-1 comprises four main articles numbering 11,700 words and a reading time of 47 minutes. Let’s take a look:

  • Part 1: Origin storyHow StockX became the stock market of hype” (2,500 words / 10 minute reading time) — Investigates how StockX evolved from a basic aggregation of price data into the multibillion dollar juggernaut we see today.
  • Part 2: E-commerce authenticationAuthentication and StockX’s global arms race against fraudsters” (3,700 words / 15 minute reading time) — A deeply nuanced analysis of StockX’s key product of authentication and the challenges of building a trusted market against an onslaught of scammers heavily incentivized to get a fake good sold.
  • Part 3: Competitive and consumer landscape Where StockX fits in the business of sneakers” (2,800 words / 11 minute reading time) — Explores how the company connected buyers and sellers, as well as its long-term impact on both groups.
  • Part 4: Future and impact The consequences of scaling up sneaker culture” (2,700 words / 11 minute reading time) — Looks at how StockX and the changes it has wrought have led to a massive change in the culture of sneakers and what that portends long term.

We’re always iterating on the EC-1 format. If you have questions, comments or ideas, please send an email to TechCrunch Managing Editor Danny Crichton at danny@techcrunch.com.

How StockX became the stock market of hype

]]> Mon, 05 Apr 2021 11:02:11 +0000 BlogLikes - Find Most Popular Blogs Amazon Ecommerce Tech EC New York Stock Exchange Engadget Witte Danny Crichton StockX EC-1 Richard Dal Porto EC Ecommerce and D2C Wall Street Journal Vogue Business William E Ketchum Nigel Sussman StockX How StockX became the stock market of hype http://feedproxy.google.com/~r/Techcrunch/~3/WMkaubtXGFw/ While the old adage goes, “Find a job you love doing, you’ll never work a day in your life,” it’s safe to assume this was well before the age of the YouTuber, “plandids” and the stock market of things. StockX may be a multibillion dollar juggernaut with massive influence radiating throughout sneaker culture today, but it started with taking the leap to transforming a personal passion into a business plan.

For founder Josh Luber, keeping his love for sneakers separate from his career was very intentional at first. As he continued to invest into his hobby, he saw something from his corporate jobs that was altogether missing from sneakers — data. As he established and dove deeper into the numbers, an entirely different vision arose. A basketball game, a check and a business later, StockX was born.

What began as a basic price chart of online sales that screamed more Microsoft Excel than startup unicorn has now become one of the most intriguing marketplaces in the world.

The timing was remarkably fortuitous. Sneakers crescendoed from a rising niche to a frenzy over the past decade, and the demand for authenticated goods likewise soared. Few other companies put together the core mechanisms required for a market to function effectively for this category. What began as a basic price chart of online sales that screamed more Microsoft Excel than startup unicorn has now become one of the most intriguing marketplaces in the world.

What’s a sneaker worth?

Before co-founding StockX, Josh Luber was consulting at IBM, deliberately working outside of sneakers to maintain it strictly as a hobby. That setup continued until he realized the opportunity to organize data around his beloved collection.

Markets can’t exist without prices, and the price of a sneaker in the secondary market a decade ago was difficult to discern. There was, of course, the retail price, but popular sneakers often gained value over time based on demand, which could wildly fluctuate over time. By scraping data openly available on , Luber and a team of 17 volunteers established Campless, a constantly updated sneaker secondary market pricing guide that launched in 2012.

“While it had a lot of flaws in it and required a lot of manual work, it gave probably the best reference point at the time,” COO and co-founder of StockX Greg Schwartz says. The Campless team was simply pulling prices from closed eBay auctions and analyzing trends from there, much like any individual seller would probably do before posting their own shoes. By scaling up the size of the dataset though, they were getting much more accurate market-clearing prices than were previously available for both buyers and sellers.

Similar to the auto industry’s Kelley Blue Book that offers estimated values for cars by model and year, Campless offered in-depth numbers on the secondary sneaker market that would eventually become a tentpole and proprietary offering of StockX.

Helicopters over malls and the chaotic rise of the sneaker craze

When Luber and his team launched Campless, there weren’t easily accessible options for buying sneakers in limited releases. Enthusiasts could buy directly from the retailer by lining up and camping out for in-store drops, scour eBay for the most legit-looking seller with the best price, or have a plug or backdoor avenue to get their prized pairs. All three options were fraught.

Josh Luber at TechCrunch Disrupt NY 2017.

Campless’ name and “know more, camp less” tagline referred to consumers camping out — sometimes spending days in line — for the latest, most coveted sneaker releases. Flight Club, which opened in New York City in 2005, was initially for consignment and typically carried rare, older shoes rather than new pairs. For individual resellers though, eBay and Craigslist were the only options to set up a one-on-one transaction at their own discretion, and neither platform had the necessary safeguards for sneaker authentication or price regulation.

This fractured system might have been sufficient for a market that remained a relatively small niche. But it had been steadily growing in popularity since the 1980s, and the scale got even bigger in the 2010s.

, Luber shared the significance of this period, pointing to one shoe as causing a sea change in the popularity of the category: the February 2012 NBA All-Star Weekend release of Nike’s “Galaxy” Foamposite, part of a celestial-themed pack worn by basketball greats like LeBron James, Penny Hardaway, Amar’e Stoudemire and Kevin Durant.

Trusted sneaker blog Sole Collector called this specific release “one of the most chaotic sneaker releases of the last decade” because it caused “riots nationwide as sneakerheads tried desperately to get their hands on pairs.”

Michael Jordan attends Jordan All-Star With Fabolous 23 in 2012. Image Credits: Nike (Alexander Tamargo/WireImage)

“That was definitely the first time I remembered people other than my group of friends that loved shoes talking about a ‘drop,’” 24-year-old sneaker enthusiast Mark Sabino said.

Andy Oliver, director of e-commerce at the sneaker and streetwear lifestyle brand Kith, looks back on it as a tipping point as well. “I think it was a combination of the right model — Foams were super hot — with a graphics treatment that was really unique at the time. Then, from a marketing perspective, it’s tied to All-Star Weekend, which was a huge deal in 2012. When everyone started to get a sense that they were mostly unattainable, they blew up on another level.”

Brendan Dunne, co-host of Complex Media’s sneaker show Full Size Run, said the release set a new benchmark for chaos and hype. “I think the image of helicopters flying over the mall in Orlando where they released is the enduring image.”

A community that had been around since the 1980s was hurtled into the mainstream eye. Yet even more fuel was added to what Luber called “limited edition sneaker collecting” with the growing popularity of Instagram. For the first time, sneaker enthusiasts could share their favorites with the entire world, showing off their rare finds to potentially millions of people on their feeds and not just their friends in person. Securing that All-Star Weekend drop meant not just being cool, but globally cool, intensifying the pressure on a market that was completely unprepared for the scale of demand that was arriving.

]]> Mon, 05 Apr 2021 11:01:47 +0000 BlogLikes - Find Most Popular Blogs TC Ecommerce Craigslist Microsoft Ebay New York City Tech Nike Michael Jordan Kelley Blue Book Ibm Collectibles Orlando Campless Microsoft Excel Kevin Durant Complex Media Andy Oliver Josh Luber Luber StockX Greg Schwartz Brendan Dunne EC-1 EC Ecommerce and D2C TechCrunch Disrupt NY 2017 Campless LeBron James Penny Hardaway Amar e Stoudemire Jordan All Star With Fabolous Nike Alexander Tamargo WireImage Mark Sabino Authentication and StockX’s global arms race against fraudsters http://feedproxy.google.com/~r/Techcrunch/~3/a3nW5hctEAM/ As we saw in part one of this EC-1, sneakers have evolved from an enthusiast community of collectors into a global multibillion dollar business, in part due to StockX’s influence over this burgeoning market. Individual pairs can sell for well over $100,000, and as sneakers have gone from cultural symbol to cultural asset, they have increasingly become the target for criminal groups looking to make a quick buck from counterfeits.

StockX is fighting an arms race against international criminals who can make a killing if they can get a fake through its authentication processes. Every year, StockX improves its practices, and every year, its opponents sharpen their skills, getting just one more detail right. Sneaker fraud is big business: The feds seized tens of millions of dollars in fake shoes last year in just one haul. By some estimates, the sneaker fake goods market is growing and is now well into the nine figure range.

As the key to the community’s trust and the company’s international expansion, StockX reveres themselves most on the constantly evolving process of authentication. Yet even with all its resources and skill, it can’t always get it 100% right.

As the key to the community’s trust and the company’s international expansion, StockX reveres themselves most on the constantly evolving process of authentication.

In this part of the EC-1, we’ll explore how authentication got started at StockX and how it has grown, as well as what it takes to compete with the fakes — and the fallout when the company gets a decision wrong.

“It was a crazy feeling — the worst.”

Longtime sneaker collector and newish sneaker YouTuber Blake Yarbrough always wanted Nike’s Tom Sachs Mars Yard sneakers. The 2012 extra exclusive release features Vectran fabric from the airbags on the actual Mars Excursion rover. However, as a one-time manager at FinishLine, he couldn’t see himself spending more than retail on sneakers.

“The original pair from 2012 is the one I really wanted and still want, but they’re just so much more money. When the 2.0 came out in 2017 I was like, they changed the materials and whatever, the color is a little bit different, but I still love it.”

The NikeCraft Mars Yard 2.0 sneakers. Image Credits: Nike

He picked up a pair for $1,650 — the most he’d ever spent on shoes at the time — from StockX in 2018 and wore them often and carefully, even removing the insoles and replacing them with other inserts so as not to wear off the insole graphics. The Tom Sachs Nike box has a quote that says, “These shoes are only valid if worn, and worn to death, by you. Poser need not apply.” Unlike some sneaker collectors or resellers who keep their shoes “deadstocked” or unworn, Yarbrough took that message to heart.

By the end of 2020 the resale value of his sneakers had significantly increased, ranging from $2,400 to $4,500. Yarbrough decided it was time to part ways with the shoes. They had a good run and he wanted to make some money to put toward other things. He posted the used pair on StockX-competitor GOAT for $3,000 and quickly received an offer for $2,600. Pleased with this number, he packaged them up in the original box along with a booklet that came with the shoes and sent them to GOAT to be authenticated and sent to the purchaser.

Yarbrough received an email saying the shoes would not be accepted, the transaction would not go through and that they were fakes. “It was a crazy feeling — the worst.” Yarbrough recalls it derailing his entire day and taking about two weeks to decide what to do about it.

“To open that email, see that it said that they are replicas, and know, essentially, that I’m stuck with these shoes, and I’m out this amount of money is a really terrible feeling. It was something I haven’t ever really felt before, like getting scammed,” he says.

The dream and nightmare of Black Friday

Before we continue with Yarbrough, let’s rewind the clock a few years back to the genesis of StockX. Sadelle Moore recalls the early days when he’d be sitting around the StockX Detroit headquarters waiting for sneakers to arrive. The brand launched with four dedicated authenticators in 2016, and he joined pre-launch during beta testing.

“Early on we were getting 10 boxes a day and didn’t have a set process. We’d wait for UPS to come with our orders and each have to make our own boxes. It was just me and a couple other guys, and it took us all a day to go through 10 shoes. It was such a long process,” Moore recalls.

Sadelle Moore was one of the first authenticators to join StockX. Image Credits: StockX.

As an early-stage company, processes were vague. “We’d have to fulfill our own orders as authenticators then. Once I authenticated the shoe, I’d put it right back in the box and I just may have to ship it right out, and that would take all day,” he said.

COO Greg Schwartz points to StockX’s first Black Friday in November 2016 as a particularly pivotal day in the company’s transformative early years. “We all went from sitting behind a computer or traveling or whatever anyone was doing at the time to literally everyone working in that authentication center — which was really just the basement of the building we were in — as boxes were piling up. UPS was unable to even deliver them all because it exceeded the loading dock capacity.”

]]> Mon, 05 Apr 2021 11:01:23 +0000 BlogLikes - Find Most Popular Blogs Ecommerce Tech Nike UPS EC Detroit Collectibles Moore Yarbrough StockX Poser Greg Schwartz NikeCraft Mars Yard EC-1 Tom Sachs Mars Yard EC Ecommerce and D2C YouTuber Blake Yarbrough Tom Sachs Nike StockX Sadelle Moore Sadelle Moore